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The  Automatic  System 

TREATING  OF 

The  Doctrine  of  the  Triple  Tax 


By  I.  CRANE  CLARK 

"Every  cAmerican  should  read  it." 

"Reduces  political  economy  to  an  exact 
science," 

"Places  labor  on  the  pedestal  long  occupied 
by  gold." 

"Will  prevent  money  stringency." 

"The  remedy  for  the  present  chaotic  eco- 
nomic conditions." 

"The  most  important  document  presented  to 
the  American  people  since  the  Declara- 
tion of  Independence." 

"Not  a  pessimistic  note;  no  censure  for  the 
capitalistic  class;  no  knifing  of  the  labor 
unions;  no  curses  for  the  captains  of  in- 
dustry; no  condemnation  of  the  agitator; 
helpful  to  all  classes." 

"It  is  a  prophecy  sprung  fi*om  the  heart  of  an 
cAmerican  Patriot." 

CLOTH  BOUND,  $1.00  A  LIBERAL  DISCOUNT 

PAPER  BOUND,      .50  TO  ALL  DEALERS 

ALL  ORDERS  MUST  BE  PREPAID 
ADDRESS 

D.  S.  CLARK,  Publisher 

PIONEER  BUILDING 
DENVER 


>'=^ 


IRA  CRANE  CLARK 


SIfp  Automattr  i>gfitem 

TREATING  OF 

®lfj?  l0rtntt^  of  tifi?  Sriple  Sax 


BY  I.  CRANE  CLARK 


D.  S.  CLARK.  PUBUSHER 
DENVER.  COLO. 


Copyrighted,  1908, 

By  D.  S.  Clark, 

Denver,  Colo. 


CONTENTS 

CHAPTER   I. 

Introductory & 

CHAPTER   II. 
A  Brief  Discussion  of  Various  Prevalent  Reform  Ideas.  ...    24 

CHAPTER   III. 
Calling  Attention   to   the  Principal   Defect  of  Our  Present 

Commercial  System 37 

CHAPTER  IV. 
Showing  the  Inefficiency  of  Various  Reform  Movements  as 
Remedies  for  the  Defect  Pointed  Out  in  the  Preceding 
Chapter,  and  Suggesting  a  Proper  Remedy,  Consisting 
of  Three  Co-Operative  Laws  Relating  to  Money,  Ma- 
chinery   and    Pensions 54 

CHAPTER  V. 
A  Description  and  Partial  Discussion  of  the  Proposed  Law 

Relating  to  Money 62 

CHAPTER  VI. 
A  Description  and  Partial  Discussion  of  the  Proposed  Law 

Relating  to  Taxing  Labor  When  Done  by  Machinery.  .  .    71 

CHAPTER  VII. 
A  Description  and  Partial  Discussion  of  the  Proposed  Law 

Relating  to  Pensions 77 

CHAPTER    Vlil. 
Containing   a   General    Discussion    of   the   Three    Proposed 
Laws   and    Showing    Their    Application    to   the    Social 
Problem 8S 

CHAPTER  IX. 

Trusts 12» 

CHAPTER  X. 
Recapitulation,    Showing    the    Simplicity    of    the    Remedy 

Suggested 131 

CHAPTER  XI. 
Conclusion 13$ 


DEDICATION. 

To  Andrew  Carnegie,  Poor  Boy,  Energetic  Youth, 
Man  of  Iron,  of  Success  and  of  Millions: 
I  believe  that  you  are  a  representative  of  the 
capitalistic  class,  who  sincerely  feels  and  acknowl- 
edges the  responsibilities  which  are  incident  to  the 
powerful  position  which  you  occupy  among  men,  and 
that  you  are  honestly  working  for  the  good  of  society. 
I  believe,  also,  that  the  bringing  about  of  that  good 
can  best  be  accomplished  by  the  capitalist  and  the 
laborer  approaching  the  solution  of  the  questions 
between  them  in  a  spirit  of  friendliness  and  of  mu- 
tual forbearance,  and  subjecting  those  questions  to 
the  calm  reasoning  which  men  possess  in  moments 
of  peace. 

Hence  it  is  that  I,  representing  the  laborer,  and 
working  also  for  the  good  of  society,  conceive  that 
the  only  true  solution  will  be  one  beneficial  both  to 
the  laborer  and  his  employer,  and  in  presenting  such 
a  plan  to  the  public,  am  willing  to  ignore  the  dis- 
parity existing  between  your  eminent  position  and 
my  own  obscurity,  and  dedicate  this  work  to  you. 
May  the  efforts  of  both  of  us  be  productive  of  good. 
Shake! 


PREFACE. 

In  presenting  to  the  public  this  work,  some 
seven  years  after  its  completion,  the  author  does  so 
without  the  slightest  fear  that  the  lapse  of  that  in- 
terval has  rendered  it  in  any  sense  behind  the  times. 
He  felt  when  he  wrote  it  that  its  pages  were  fraught 
with  advanced  thought,  and  now^  at  the  date  of  its 
tardy  appearance,  he  believes  that  it  is  still  some 
years  ahead  of  the  period  in  which  it  is  published. 

Several  months  after  writing  it  he  entered  into 
a  contract  for  its  publication,  but  finding  that  the 
publishers  were  unable  to  do  the  advance  advertising 
which  their  contract  called  for,  he  cancelled  the  con- 
tract, paid  them  for  the  work  as  far  as  it  had  pro- 
gressed, and  stored  the  electroplates  away  in  a  closet. 
The  preface  to  the  book  as  then  proposed  was  as 
follows : 

"As  indicated  by  the  date  attached  to  the  closing  note  of 
the  author,  this  work  was  completed  by  him  October  1,  1900. 
Some  months  elapsed  before  he  attempted  to  make  arrange- 
ments for  presenting  it  to  the  public,  and  hence  it  is  that  it 
now  appears,  almost  a  year  after  its  completion.  The  work 
covers  a  large  field  in  reform  ideas  lying  between  the  present 
system  of  government  in  this  country  and  a  Socialistic  form  of 
government,  and  demonstrates  that,  without  resorting  to  a 
state  of  absolute  Socialism,  and  without  giving  up  any  of  their 
personal  liberties,  individual  rights  or  great  public  institutions, 
the  American  people  may,  within  a  comparatively  short  tii^e, 
hope  for  relief  perfectly  adequate  to  their  needs,  and  far  more 
desirable  and  beneficial  than  such  a  state  or  Socialism  could 
possibly  be." 

The  above  explanation  is  made  in  order  that  the 
reader  may  understand  why,  in  the  case  of  the  few 
statistics  used,  the  figures  relate  to  a  period  over 
seven  years  ago. 

Respectfully, 

T.  CRANE  CLARK. 
November  2,  1907. 


THE  AUTOMATIC  SYSTEM. 

CHAPTER  I. 

INTRODUCTORY. 

Laying  aside,  for  the  time  being,  that  becoming 
modesty  which  has  always  graced  my  acts  in  private 
life,  I  now  enter  upon  a  public  career  and  announce 
myself  a  leader  of  mankind.  I  have  long  waited  for 
an  unobserving  public  to  penetrate  my  humble  ex- 
terior and  recognize  for  itself  my  fitness  for  the  posi- 
tion I  now  assume,  but  time  has  convinced  me  that 
the  great  ability  which  I  possess  as  a  statesman  and 
leader  of  men  is  destined  to  pass  unnoticed  by  those 
who  might  otherwise  profit  by  it,  unless  by  some  act 
of  my  own  I  cause  the  light  of  publicity  to  fall  upon 
me;  and  hence  it  is  that,  disregarding  mj  naturally 
retiring  disposition  and  sensitive  feelings,  I  present 
myself  to  my  fellowmen  in  the  following  pages.  I 
beg,  however,  that  none  of  my  readers  will  for  a 
moment  attribute  my  action  to  a  desire  for  personal 
glory,  but  that  all  will  accept  my  statement  when  I 
say  that  I  am  the  most  humble  and  unassuming  of 
men  and  that  nothing  but  the  strictest  sense  of  duty 
impels  me  to  my  present  labor.  If,  from  reading  the 
daily  press,  from  hearkening  to  the  voice  of  the  pul- 
pit, or  in  scanning  the  laws  that  come  from  our  va- 
rious Legislatures,  national  and  state,  I  could  note 
any  indication  that  the  sons  of  men  were  about  to 
solve  the  problem  of  harmoniously  living  in  peace 
and  prosperity,  my  pen  would  remain  inactive;  but 


10  THE    AUTOMATIC    SYSTEM 

the  hopeless  manner  in  which  affairs  are  drifting 
along,  and  the  very  apparent  inability  of  mankind  to 
properly  use  the  advantages  which  art,  science  and 
mechanics,  by  the  grace  of  God,  have  given  us  during 
the  century  now  closing,  lead  me  to  believe  that  the 
time  has  arrived  when  I  should  put  aside  all  false 
ideas  of  modesty,  and  courageously  take  uj)  the  bur- 
den of  teaching  my  fellow  citizens  how  to  govern 
themselves.  I  am  aware  that  many  books  have  been 
written  on  the  subject,  and  I  will  state  that  the  more 
of  them  I  have  read  the  more  helpless  has  mankind 
appeared  to  me,  for  while  those  books  have  been 
very  eloquent  in  describing  the  conditions  which  con- 
front us,  and  while  some  of  them  have  quite  closely 
(although  not  fully)  analyzed  the  causes  which  have 
led  to  those  conditions,  still  not  one  of  them  has  sug- 
gested a  satisfactory  remedy  capable  of  being  imme- 
diately put  into  effect  under  our  present  form  of  gov- 
ernment. It  is  my  purpose  in  this  book  to  supply 
such  a  remedy. 

Think  not  from  any  statements  here  made  that 
I  loc'i:  back  upon  the  glorious  history  of  men  and 
event -^  from  the  beginning  of  time  and  conceive  my- 
self to  be  the  greatest  character  that  has  appeared 
upon  the  scene — not  at  all!  The  past  has  had  its  sit- 
uations and  no  one  has  more  admiration  and  respect 
for  the  great  and  honorable  men  who  have  dealt  with 
its  difficult  problems  than  I  have;  and  as  for  my  con- 
temporaries, the  world  abounds  with  eminent  men, 
too  numerous  to  mention,  who  are  infinitely  superior 
to  me  in  everything  but  the  subject  on  which  I  now 
write;  but  that  subject  is  one  that  has  become  of  par- 
amount importance  to  the  great  body  of  the  peopk, 


THE    AUTOMATIC    SYSTEM  11 

and  I  must,  therefore,  modestly,  but  firmly,  insist 
upon  taking  my  position  as  the  man  of  the  hourl 

Those  who  turn  the  pages  of  history  in  search 
of  an  object  lesson  to  guide  them  at  this  time  will  be 
disappointed,  for  there  is  nowhere  in  the  annals  of 
history  a  situation  which  presents  a  parallel  case  to 
the  present.  Conditions  have  changed.  The  situa- 
tion is  unique  and  the  problem  is  larger  than  it  has 
ever  been  before.  Today  steam  locomotion  on  water 
and  on  land  quickly  and  cheaply  transports  the  peo- 
ple and  the  products  of  every  part  of  the  world  to 
every  other  part.  Today  artificial  refrigeration 
gives  assurance  that  such  of  those  products  as  are 
perishable  will  arrive  at  their  destination  thousands 
of  miles  away  in  as  good  condition  as  when  they 
started.  Today  machinery  not  only  augments  the 
producing  ability  of  labor  in  almost  every  line  of  in- 
dustry, but  in  many  instances  actually  displaces 
labor.  Today  electricity  exercises  its  mysterious 
potency  to  the  end  that  the  happenings  of  the  utter- 
most corners  of  the  earth  are  known  to  the  inhabi- 
tants of  the  entire  world  upon  the  same  day  that  they 
occur,  and  the  price  prevailing  in  one  market  on  the 
face  of  the  globe  determines  the  price  that  must  pre- 
vail in  all.  Today  the  daily  press  of  the  world  gives 
to  every  man  information  as  to  the  doings  and  the 
markets  of  every  country  and  of  every  clime.  Today 
the  starting  or  closing  of  a  certain  factory  in  Maine 
may  raise  or  reduce  the  wages  paid  to  laborers  in 
California.  Today  what  a  man  will  pay  in  America 
for  Minnesota  wheat  depends  on  whether  another 
man  in  England  is  buying  wheat  in  Russia  or  buying 
it  in  the  United  States.    Todav  men,  women  and  chil- 


12  THE    AUTOMATIC    SYSTEM 

dren  are  learning,  not  trades,  but  simply  parts  of 
trades.  Machinery  is  not  used  to  assist  people,  but 
people  are  hired  and  paid  poor  wages,  as  "unskilled 
labor,"  to  assist  machinery,  and  there  is  every  rea- 
son to  believe  that  the  inventive  faculty  of  the  age 
will  continue  to  improve  machinery  so  that  it  will 
need  the  assistance  of  human  labor  less  and  less. 
Today  laboring  men  and  women,  and  people  gener- 
ally, are  more  dependent  on  the  .social  system  under  which 
they  live  than  they  have  been  at  any  time  in  the  history  of 
men,  for,  while  they  are  more  learned  in  literature,  in 
the  arts  and  in  science,  still  we  have  fewer  persons 
who  are  thorough  in  any  trade  than  v/e  ever  had  be- 
fore, because,  from  the  very  necessity  of  the  case,, 
industries  are  being  carried  on  on  a  larger  scale,  and 
divided  up  into  departments,  and  all  that  any  work- 
man is  required  to  know  or  learn  is  simph^  what  per- 
tains to  his  own  department;  and  in  a  factory  or 
institution  employing  hundreds  of  hands  it  often  is 
the  case  that  the  only  one  familiar  with  the  entire 
business  is  the  manager,  superintendent,  or  foreman; 
and  this  is  becoming  true  on  the  farm  as  well  as  in 
the  factory.  Thus  you  see  that  the  great  class 
known  as  ''unskilled  labor"  has  become  very  num- 
erous, and  will  become  more  so.  Today  those  who 
belong  to  this  class  are  weak  and  helpless,  and  a 
great  number  of  them  are  unemployed,  and  their 
only  hope  is  in  just  government.  These  people,  who 
are  in  many  instances  well  educated  and  intelligent 
and  anxious  to  be  good  citizens,  are  absolutely  de- 
pendent on  whether  or  not  some  one  will  give  them  employ- 
ment. They  are  destined  to  constitute  the  great  mass 
of  the  people  of  all  countries,  for  there  is  less  and 


THE    AUTOMATIC    SYSTEM  V.\ 

less  call  (in  proportion  to  the  population)  for  labor- 
ers who  are  thorough  masters  of  any  trade,  and  the 
professions  are  being  overrun.  The  man  who  wishes 
thoroughly  and  honestly  to  probe  the  question  of 
whether  or  not  a  country  is  in  a  state  of  general  pros- 
perity will  do  well  to  examine  the  condition  of  this 
class  of  people.  The  laboring  classes  of  today,  as  of 
all  ages,  are  humble  and  lowly,  of  necessity;  but  they 
are  not  (in  one  respect)  so  distinctively  a  class  as 
formerly.  We  already  find  the  artist,  the  profes- 
sional man  and  the  college  graduate  struggling  in 
their  ranks,  side  by  side  with  the  horny  handed  son 
of  toil.  Today  the  straggle  for  livelihood  and  wealth 
is  becoming  fierce  and  men  are  being  strained  to  the 
breaking  point.  Today  the  depth  to  which  a  man 
may  fall  in  poverty  and  privation  is  limited  only  by 
his  power  to  endure  distress  and  his  ability  to  resist 
criminal  impulse.  The  common  ground  upon  which 
men  may  sink  when  they  fail  in  the  great  struggle 
for  wealth  and  position  is  too  cold  and  too  hard. 
This  is  the  ground  from  which  the  common  people  of 
all  countries  must  operate,  and  the  successful  gov- 
ernment of  the  future  will  be  the  one  that  takes  steps 
to  raise  this  ground  to  a  higher  plane,  to  the  end 
that  its  citizens  may  have  the  satisfaction  of  knowing 
that  even  the  weakest  among  them  are  prosperous. 
Today  we  are  troubled  with  that  which  an  ordinary 
honey  bee  would  hail  with  joy,  in  that  we  have  a 
thing  known  as  over-production,  and  are  face  to  face 
with  the  ridiculous  fact  that,  because  mankind  is 
able  to  produce  a  great  deal,  therefore  we  must  have 
hard  times.  Today,  if  God,  in  His  goodness,  were  to 
o'ive  a  bountiful  crop  of  corn,  wheat  or  cotton  to  one 


14  THE    AUTOMATIC    SYSTEM 

part  of  the  world,  and  refuse  it  to  other  parts,  tiie 
part  thus  favored  would  be  prosperous,  but  if  He 
were  to  give  to  every  part  of  the  world  a  good  crop 
of  com,  wheat  or  cotton,  we  are  face  to  face  with 
another  ridiculous  fact,  and  that  is  that  many 
planters  and  farmers  all  over  the  world  would,  on 
account  of  the  large  supply,  experience  very  hard 
times. 

Let  me  put  a  question  to  the  reader:  Are  you  a 
laboring  man,  a  professional  man,  a  farmer,  or  are 
you  engaged  in  mercantile  business?  And,  whatever 
you  are,  let  me  ask  you  this:  Do  3'ou  turn  every  day 
to  the  market  quotations  in  your  daily  paper?  Do 
you  know  how  to  use  the  telegraph  to  your  profit? 
Do  you  know  how  to  scheme  around  and  procure 
special  freight  rates  f  Do  you  know  how  to  corner  a 
market?  Do  you  know  how  to  form  a  trust?  Do  you 
know  how  to  obtain  knowledge  of  mercantile  events, 
and  do  you  know  how  to  use  that  knowledge  after 
you  get  it?  I  venture  to  say  that  you  do  not.  Few 
men  do.  Yet  I  want  to  say  to  you  that  there  are  men 
and  sets  of  men  who  are  masters  of  this  art.  Are 
they  using  their  knowledge  today  for  your  good  or 
for  their  own?  You  are  a  clerk  in  some  office  or  you 
are  a  workman  in  some  factory.  Can  you  cope  with 
those  men?  You  have  a  boy  seven  years  old.  He  has 
just  started  to  school.  Can  he  cope  with  those  men! 
Who  is  looking  after  your  interest?  Who  is  looking 
after  the  interest  of  that  boy?  When  he  gi'ows  up 
and  wants  to  get  married,  who  will  give  him  work! 
What  kind  of  work  will  it  be?  What  wages  will  he 
receive  ?  How  much  will  he  have  to  pay  for  a  pound 
of  beef!    How  much  will  he  have  to  pay  for  a  ton  of 


THE    AUTOMATIC    SYSTEM  15 

coal  ?  Shall  we  go  drifting  along  until  we  are  on  the 
breakers,  or  shall  we  begin  to  guide  ourselves? 

Many  writers  have  given  us  voluminous  works 
containing  valuable  statistics  and  minute  informa- 
tion on  subjects  that  come  under  the  head  of  polit- 
ical economy,  but  we  have  had  few  works  which  draw 
correct  deductions  from  those  statistics.  Many  who 
consider  themselves  well  up  in  the  study  of  political 
economy,  after  a  great  deal  of  labor,  have  gotten 
little  farther  into  the  subject  that  to  be  the  compilers 
of  great  masses  of  statistics  and  material.  They  are 
like  a  student  of  hydraulic  engineering  would  be,  who 
limited  his  efforts  in  the  mastery  of  that  science,  to 
the  discovery  of  the  location  of  and  general  infonna- 
tion  concerning  numerous  bodies  of  water,  thinking 
that,  because  hj^draulics  is  a  science  pertaining  to 
water,  the  preliminary  study  is  never  finished  until 
he  has  discovered  all  the  water *in  the  universe.  Cer- 
tainly his  work  would  be  of  value  for  the  purposes  of 
geography  or  naval  survey,  but  would  it  be  valuable 
in  connection  with  the  science  of  hydraulics? 

Students  of  political  economy  who  exhaust  them- 
selves in  the  preparation  and  study  of  statistics 
make  a  mistake.  Conditions  are  always  changing, 
and  even  if  they  were  not,  the  work  of  preparing 
information  of  this  kind  would  never  be  finished.  In 
this  work  I  shall  endeavor  to  tire  the  reader  with  but 
few  statistics,  and  shall  boldly  undertake  the  task  of 
treating  the  subject  of  political  economy  from  a  sci- 
entific standpoint. 

If  we  will  look  around  us  today  we  will  see  that 
the  powers  that  be  have  surrounded  us  with  hun- 
dreds of  the  most  useful  advantages.     Men  of  sci- 


16  THE    AUTOMATIC    SYSTEM 

ence  and  of  geniuvS  have  given  to  us  discoveries  and 
inventions  of  great  value,  and  in  all  the  professions 
there  has  been  great  progress  with  the  exception  of 
one,  but  that  one  is  an  important  exception:  I  refer 
to  the  fact  that  today  we  have  for  lawmakers  men 
who  are  for  the  most  part  simply  politicians,  and 
totally  unfit  to  perform  the  duties  devolving  upon 
them,  being  in  many  instances  the  representatives  of 
boodle  cliques  and  the  willing  tools  of  political  gangs 
composed  of  the  lowest  order  of  society.  I  think  I 
<?an  hear  many  of  my  readers  ask:  "Does  not  this 
insufferable  ass  know  that  the  United  States  is  the 
greatest  nation  on  earth  ? ' '  Yes,  thank  God,  it  is !  It 
is  greatest  in  its  past,  greatest  in  its  present  and 
greatest  in  its  hope  for  the  future ;  great  because  we 
have  free  speech  and  a  free  press;  because  we  have 
guaranteed  to  us  our  civil  and  religious  liberty  and 
the  pursuit  of  happiness ;  because  of  our  grand  public 
school  system ;  because  of  our  efficient  postal  system ; 
because  of  our  jury  system;  because  of  onr  right  to 
ballot,  and  because  all  men  are  equal  under  the  law. 
But  these  things  were  all  set  in  motion  years  and 
years  ago.  Our  public  men  of  today  hold  positions 
and  follow  out  systems  for  the  inception  of  which  we 
are  indebted  to  our  ancestors.  While  in  every  branch 
of  science  and  mechanics  new  ideals  have  arisen,  for 
our  statesmen  we  turn  to  the  past.  We  look  upon 
those  old  fellows  with  regret.  We  would  like  to  have 
them  with  us  today.  They  were  men  of  progress, 
and  the  nation  has  moved  forward  as  the  result  of 
the  impetus  they  gave  to  it.  The  laws  with  reference 
to  immigration,  with  reference  to  patents,  with  refer- 
ence to  corporations,  with  reference  to  revenue  £ind 


THE    AUTOMATIC    SYSTEM  17 

with  reference  to  money  and  banking  institutions 
which  those  men  put  into  force  paved  the  way  for 
private  energy  and  private  capital  to  accomplish  all 
that  has  been  done  in  the  way  of  the  laying  of  most  of 
the  railroad  lines  which  penetrate  every  part  of  this 
country  today;  in  the  way  of  opening  up  mining  and 
farming  lands  and  in  the  way  of  bringing  about  those 
vast  manufacturing  establishments  which  have 
shown  the  world  what  perfected  machinery  and  or- 
ganized industry  can  do.  ■  But  some  of  those  laws 
have  served  their  usefulness,  and  although  very  ben- 
eficial in  their  day,  are  absolutely  harmful  at  the 
present  time.  Governments  can  not  stand  still.  As 
conditions  change  the  slack  in  the  rope  must  be  taken 
up.  Who  is  attending  to  this  matter  ?  This  is  a  gov- 
ernment of  the  people.  You  are  one  of  the  people. 
Now  I  want  you  to  scratch  your  head  and  answer  me 
a  question:  Are  you  taking  any  particular  interest 
in  running  the  thing?  Do  you  know  any  of  your 
friends  who  are?  Do  you  think  the  little  blow  which 
you  strike  on  the  governmental  machine  with  your 
vote  makes  much  of  an  impression?  It  is  a  grand 
thing  to  have  a  vote,  but  it  is  absolutely  useless  to 
have  it  unless  that  vote  accomplishes  something 
more  than  gratifying  a  feeling  of  Fourth  of  July  sen- 
timent. 

This  may  appear  to  be  pessimistic,  but  it  is 
really  my  purpose  to  carry  to  mankind  a  message  of 
hope.  When  compared  with  its  glorious  future,  hu- 
manity is  today  in  but  a  state  of  chaos.  Blink-eyed 
out  of  the  dark  past  come  the  troubled  races.  The 
leaders  of  the  various  hordes  are  just  beginning  to 
realize  that  they  are  marching  them  toward  a  com- 


18  THE    AUTOMATIC    SYSTEM 

mon  point  where  shines  the  great  light  of  truth  on 
the  heights  of  idealism.  They  are  just  beginning  to 
realize  that  the  affairs  of  men,  although  complicated, 
have  nevertheless  a  limit  and  a  scope  which  may  be 
brought  within  the  workings  of  a  perfected  system. 
Humanity  is  but  now  emerging  from  its  "Tower  of 
Babel"  period  in  the  working  out  of  such  a  system. 
In  an  article  recently  appearing  in  the  daily  press  it 
was  stated  that  over  900  different  dialects  contribute 
to  the  ' '  confusion  of  tongues ' '  of  the  sons  of  men  and 
hamper  the  exchange  of  their  ideas  and  knowledge. 
Can  you  not  see  that  the  great  vine  of  civilization 
has  only  now  succeeded  in  sending  its  tendrils 
around  the  world  and  under  the  quickening  influence 
of  this  age  of  electricity  and  steel  is  just  beginning 
to  gather  its  parts  together  preparatory  to  putting 
forth  the  perfect  flower  of  an  ideal  humanity  ? 

I  bid  thee  hope !  The  time  is  coming  when  men 
and  women  will  be  beautiful,  perfect,  healthy  beings ; 
when  that  the  body  will  be  a  fit  receptacle  for  the 
soul,  and  when  that  a  worthier  race  will  survive,  to 
whom  will  be  revealed  the  secret  of  life  and  the  rea- 
son of  our  existence.  If  among  all  the  millions  upon 
this  globe  there  existed  but  one  breast  in  which  the 
seed  of  that  ideal  humanity  were  implanted  I  should 
not  doubt  the  ultimate  survival  of  that  God-given 
spark.  How  then  can  I  doubt  the  future  of  the  hu- 
man race  when  I  see  the  fight  for  progress  and  bet- 
terment which  is  being  made  by  noble  men  and 
women  of  all  races  and  all  climes'? 

However,  any  system  under  which  men  operate 
to  be  a  success  must  be  a  system  comprehending  all 
the  interests  of  mankind  on  the  subject  sought  to  be 


THE    AUTOMATIC    SYSTEM  19 

controlled,  and  yet  mnst  be  a  system  so  devoid  of 
complications  as  to  be  of  simple  operation.  I  con- 
ceive (and  will  hereafter  state  my  reasons  therefor) 
that  at  this  time  there  is  no  subject  which  it  is  so 
important  for  the  human  race  to  have  controlled  as 
that  relating  to  their  commercial  dealings  with  one 
another,  including  as  it  does  the  great  questions  of 
finance,  property  rights,  labor,  corporations,  trusts, 
etc.,  and  I  propose  to  treat  the  matter  as  an 
exact  science  and  present  for  your  consideration  a 
perfect  system.  Don't  you  realize  that  you  have 
practically  no  system  at  all?  Your  machine  as  now 
constructed  has  not  in  its  whole  makeup  one  perfect 
wheel.  Its  parts  do  not  begin  to  reach  the  materials 
with  which  it  must  work.  All  is  friction  and  strain 
and  break-down.  See  the  railroad  magnates  put 
through  a  deal  and  boom  a  certain  stock!  See  the 
money  kings  produce  a  stringency  and  bring  that 
stock  down  again !  See  a  labor  union  succeed  in  hav- 
ing wages  raised  in  one  particular  line  of  industry! 
See  a  trust  put  up  the  prices  of  the  output  produced 
by  those  laborers  to  offset  the  raise!  See  them  yank 
the  commercial  machine  back  and  forth!  See  the 
suffering  and  crime  and  desolation  accompanying 
these  operations!  Do  you  not  realize  that  one  part 
of  the  machine  is  torn  down  in  order  to  let  the  other 
part  work  1  Would  it  not  be  better  if  it  were  a  per- 
fect and  smoothly  running  machine  designed  to  work 
without  friction  by  reason  of  the  fact  that  those  who 
had  constructed  it  had  carefully  studied  the  commer- 
cial proposition  as  a  whole  and  taken  into  considera- 
tion those  things  which  had  theretofore  caused  the 
strain  and  friction? 


20  THE    AUTOMATIC    SYSTEM 

In  laying  before  you  later  on  in  this  work  the 
l^lans  of  a  perfect  commercial  system  it  is  my  pur- 
pose to  take  up  the  question  of  political  economy  and 
at  the  point  of  its  juncture  to  the  problem  of  civil 
government,  reduce  it  to  an  exact  science;  but  I 
think  it  well  at  this  portion  of  the  work  that  I  should 
partially  outline  the  system,  without,  however,  at- 
tempting to  set  out  the  entire  plan,  or  to  show  its  ap- 
plication to  present  day  conditions  until  I  reach  the 
discussion  of  that  subject  in  its  proper  order  in  a 
later  chapter.  Taking  the  doctrine  of  equality 
among  men  as  being  the  underlying  principle  of  a 
republican  form  of  government,  I  shall  propose  a 
practical  application  of  that  doctrine  to  the  three 
things  of  most  importance  to  the  physical  welfare  of 
man,  to-wit:  land,  labor  and  money — land  being 
necessary  to  the  existence  of  humanity  at  all,  labor 
producing  from  the  land  the  means  of  livelihood,  and 
money  being  the  medium  by  which  the  various  prod- 
ucts are  interchanged.  By  taxing  each  of  these  in 
the  manner  which  I  shall  suggest,  a  continual  process 
of  equalization  will  be  kept  up  with  reference  to  all 
of  them.  In  the  case  of  the  labor  of  the  individual 
man,  this  tax  is  unnecessary,  as  there  already  exists 
a  natural  equalization  of  labor  in  that  respect,  but 
where  labor-saving  machinery  is  used,  the  labor  rep- 
resented by  that  machinery  will  be  taxed.  The  tax 
on  money  will  be  a  small  automatic  monthly  tax,  not 
depending  for  its  collection  upon  the  honesty  of  the 
holder  of  the  money,  but  the  money  itself,  showing 
plainly  whether  it  has  been  taxed  or  not.  However, 
the  tax  will  not  result  in  the  money  becoming  of  odd 
or  disproportionate  denominations  or  in  the  loss  of 


THE    AUTOMATIC    SYSTEM  21 

the  decimal  system  in  our  money.  The  tax  will,  how- 
ever, prevent  money  from  being  used  as  a  means  of 
hoarding  wealth  and  will  insure  its  being  constantly 
in  use  as  a  medium  of  exchange.  The  products  of 
labor,  on  the  contrary,  will  not  be  taxed,  and  men, 
instead  of  trying  to  become  rich  in  money,  will  thus 
be  encouraged  to  become  rich  in  the  products  of 
labor,  i.  e.,  buildings  and  improvements  on  their 
lands,  in  diamonds  and  precious  stones,  in  gold  and 
silver  (which  will  not  be  money  under  the  proposed 
system),  in  libraries,  works  of  art,  stocks  of  goods, 
etc.  The  government  will  then  be  in  charge  of  all 
railroad  and  street  car  lines,  of  all  electric  light  and 
power  plants,  telegraph  and  telephone  systems,  water 
works,  coal  and  iron  mines,  oil  and  gas  wells,  and  all 
such  industries  which  are  of  a  semi-public  character, 
and  the  money  then  in  use  will  be  redeemable  in  the 
service  of  products  of  any  industry  operated  by  the 
government. 

Henry  George,  in  his  doctrine  of  the  Single  Tax, 
has  evidenced  a  faint  perception  of  how  important  a 
factor  for  equalization  among  men  the  power  of  tax- 
ation vested  in  governments  can  be  made  to  become ; 
but  the  Single  Tax  would  simply  be  a  faint  blow  in 
the  right  direction.  It  is  an  implement  entirely  too 
short  to  reach  the  object  striven  for.  It  ignores  the 
co-relative  importance  of  that  great  physical  trinity: 
land,  labor  and  money ;  and  by  controlling  the  affairs 
of  men  with  reference  to  simply  one  of  them,  seeks 
to  cover  the  whole  situation.  In  contradistinction 
to  this  the  plan  of  government  which  I  am  advocat- 
ing in  these  pages  might  be  called  ' '  The  Triple  Tax, ' ' 
or  ''Advanced  Henry  Georgeism."    Before  you  will 


22  THE    AUTOMATIC    SYSTEM 

believe  in  it,  you  must  read  its  application  to  present 
day  conditions  as  set  forth  in  the  pages  which  follow. 
I  would  also  state  that  I  present  this  plan  to  you  not 
as  a  suggestion  or  a  piece  of  advice,  but  as  a  proph- 
ecy. In  other  words,  I  believe  that  while  at  certain 
times  certain  men  loom  above  their  fellows  and  are 
made  the  instruments  of  providence  for  the  time 
being,  still  they  are  but  incidents  in  a  great  general 
plan  that  moves  along,  directed  by  a  higher  impulse 
than  any  one  man  can  possess.  In  that  view  of  the 
case  the  true  reformer  should  do  as  the  wise  physi- 
cian: that  is,  he  should  realize  that  he  can  not  con- 
trol, but  can  only  aid  nature.  Therefore,  in  present- 
ing to  you  this  plan,  I  am  only,  as  I  conceive  it,  stat- 
ing to  3^ou  a  future  state  of  affairs  that  will  surely 
come  to  pass,  irrespective  of  the  jDublication  of  this 
book,  it  simply  being  my  object  to  call  your  attention 
to  the  true  conditions  through  which  the  social  body 
is  about  to  pass,  in  order  that  we  may  aid  and  make 
less  painful  that  passage.  Can  you  not  see  the  signs 
of  the  times?  Is  it  not  evident  that  in  the  case  of  in- 
dustries of  a  semi-public  character  the  social  body 
has  ceased  to  reap  benefit  from  having  those  indus- 
tries controlled  by  private  capital?  That  benefit  in 
the  past  we  must  admit  was  so  great  as  to  be  almost 
incalculable,  but  do  you  not  realize  that  the  great  law 
of  progress,  like  all  natural  laws,  is  an  inflexible  and 
not  a  sentimental  one!  Today  i^rivate  control  of 
public  utilities  has  become  a  menace.  Both  expe- 
diency and  the  permanent  good  of  society  demand  a 
change.  Can  you  not  see  that  that  change  will 
surely  come  and  that  it  is  well  for  us  to  expect  and 
prepare  for  it  so  that  the  shock  of  making  it  will  be 


THE    AUTOMATIC    SYSTEM  23 

less  to  the  social  structure  and  so  that  there  will  be 
no  unnecessary  straining  of  private  rights  in  the  in- 
terests of  the  public  good?  Do  you  draw  no  infer- 
ence from  the  growing  sentiment  in  favor  of  munici- 
pal ownership  of  street  cars,  water  works  and  elec- 
tric light  and  power  plants  in  the  various  cities  of 
this  country  today?  Is  it  not  apparent  to  you  that 
a  man  who  is  not  in  favor  of  public  ownership,  in 
order  to  he  consistent,  should  advocate  the  sale  to  pri- 
vate individuals  of  the  United  States  postoffice  sys- 
tem, and  should  advocate  a  similar  sale  of  all  utili- 
ties under  municipal  control  in  the  particular  city 
where  he  lives  ?  I  say  to  you  that  the  day  is  coming 
when  the  national  government  is  going  to  need  a 
great  many  of  these  industries  to  use  as  a  basis  of  its 
monetary  system  and  the  various  cities  sJioiiId  start  in 
and  build  up  public  ownership  in  every  part  of  the  country, 
so  as  to  have  them  ready  to  turn  over  some  day  to  the  na- 
tional government  under  an  amendment  to  the  Constitu- 
tion of  the  United  States.  By  so  doing,  you  will  insure 
the  success  of  the  plan  and  will  lessen  the  social  dis- 
turbance incident  to  the  change.  As  for  the  great 
unlawful  trusts  that  now  exist  in  this  country,  they 
have  already  assembled  certain  public  utilities  into 
handsome,  large,  well-working  packages  signifi- 
cantly convenient  for  being  handed  over  to  and  run 
by  a  government.    Ponder  well  my  prophecy. 


CHAPTER  II. 

A  BRIEF  DISCUSSION  OF  VARIOUS  PREVALENT  REFORM 

IDEAS. 

Did  you  ever  listen  to  laborers  talking  over  tlieir 
pipes?  They  can  not  come  to  an  agreement.  They 
agree  on  very  little  except  that  a  rich  man  is  a  bad 
thing.  They  do  not  reflect  that  a  rich  man  is  only 
doing  what  a  poor  man  is  doing,  that  is,  putting  as 
big  a  space  as  possible  between  himself  and  misery. 
My  friend,  what  this  country  needs  is  not  less  rich, 
but  less  poor  men.  Some  rich  men  get  their  wealth 
very  honestly,  and  some  of  them  get  it  in  a  manner 
far  from  honest,  although  it  may  be  well  enough  to 
say  right  here  that  stealing  is  not  confined  to  rich 
men.  There  are  many  poor  men  who  are  quite  ex- 
pert at  stealing.  Did  it  ever  occur  to  you  that  we 
make  a  bigger  bugaboo  out  of  a  rich  man  than  he 
really  is  ?  These  men  of  wealth  have  more  influence 
in  the  world  than  you  and  I  have,  and  it  is  true  that 
they  are  using  their  influence  for  their  own  good, 
but  they  are  not  so  wise  and  powerful  as  they  are 
given  credit  for.  If  they  are,  why  is  it  that  men  are 
out  of  work  ?  Instead  of  making  a  profit  on  the  labor 
of  simply  a  part  of  the  people,  why  do  not  these  men 
who  control  the  industries  of  the  world  give  work  to 
every  man,  woman  and  child  that  is  willing  to  work, 
and  make  a  profit  on  the  labor  of  all  of  them  ?  Why 
don't  they  run  day  and  night  shifts,  if  they  can  get 
people  to  work,  and  make  a  profit  on  every  hour  of 
labor  that  men  are  willing  to  perform?    Labor,  when 


THE    AUTOMATIC    SYSTEM  25 

employed  with  that  end  in  view,  will  always  produce 
wealth,  but  under  our  present  system,  if  these  capi- 
talists were  to  employ  labor  to  the  extent  that  I  have 
above  suggested,  there  would  be  such  an  over-produc- 
tion of  wealth  that  these  men  would  not  know  how  to 
make  a  profitable  use  of  it,  and  the  fact  that  they  do 
not  possess  that  knowledge,  but  on  the  contrary  are 
even  now  forming  trusts  with  the  purpose  of  limiting 
and  restricting  the  production  of  material  wealth  in 
certain  lines  of  industry,  shows  that  these  men  of 
capital,  who  have  the  reputation  of  controlling  the 
situation,  in  reality,  do  not  understand  it  themselves, 
but  that  the  whole  thing  is  drifting  and  carrying 
with  it  both  the  rich  and  the  poor. 

Another  thing  that  the  laborers  agree  on  over 
their  pipes  is  that  most  of  the  trouble  is  caused  by 
the  very  thing  I  have  just  mentioned,  to-wit:  over- 
production. They  seem  to  accept  it  as  a  philosoph- 
ical conclusion  that  the  market  must  become  glutted 
with  goods,  and  then  that  the  factory  must  shut 
down  and  the  laborer  quit  work.  They  also  are  smart 
enough  to  see  that  combinations  of  men  are  at  work 
who  get  control  of  a  certain  product  and  then  delib- 
erately shut  down  the  factories  which  produce  that 
product  (even  before  the  market  is  glutted),  for  the 
purpose  of  securing  an  artificial  price  for  such  of  the 
product  as  is  in  existence  in  their  hands.  They  seem 
to  think  that  if  they  can  only  stop  these  combina- 
tions or  trusts  from  operating,  that  that  is  the  best 
they  can  do,  and  that  they  will  have  to  submit  to  it 
when  the  factories  shut  down  from  what  they  con- 
sider a  good  reason — that  is,  from  over-production. 
They  say  that  can't  be  helped.    They  say  it  is  "only 


26  THE    AUTOMATIC    SYSTEM 

natural. ' '  Now,  in  my  limited  study  of  natural  his- 
tory, I  have  found  no  animal,  excepting  man,  that 
experiences  hard  times  on  account  of  over-produc- 
tion. Certain  it  is  that  I  have  never  found  any  ani- 
mals which  allowed  certain  members  of  their  species 
to  nearly  starve  on  account  of  over-production,  and 
I  refuse  to  believe  that  the  shutting  down  of  factories 
on  account  of  over-production  is  the  result  of  natural 
laws.  I  think  the  laws  of  man  are  responsible  for 
the  situation. 

These  men  also  agree  that  machinery  is  a  bad 
thing,  and  they  suggest  remedies.  They  say:  ''Let 
us  have  a  law  reducing  the  hours  of  labor."  They 
appear  to  think,  just  as  rapidly  as  machinery  is  per- 
fected and  improved  so  that  men  can  do  more  work 
with  it,  that  just  that  fast  the  legislatures  of  the 
country  ought  to  reduce  the  hours  of  labor.  Their 
object  is  to  have  it  so  that  all  men  will  have  employ- 
ment, and  there  is  no  doubt  in  the  world  but  that  if 
we  reduce  the  hours  of  labor  to  a  great  enough 
extent,  all  men  will  get  employment  a  certain  number 
of  hours  each  day.  But,  my  friends,  this  is  wasteful 
of  the  gifts  of  God;  this  is  the  wrong  road  to  prog- 
ress. It  is  like  building  a  line  of  railroad  by  tearing 
up  the  track  at  one  end  and  putting  it  down  at  the 
other.  It  is  a  sorrowful  thing  to  think  that  men 
want  to  waste  the  possibilities  of  machinery  in  this 
manner.  The  eight-hour  workday  does  not  consti- 
tute such  a  waste,  because  eight  hours  are  as  many 
as  any  man  ought  to  work  in  a  day  in  justice  to  his 
own  health,  but  the  remedy  of  shortening  the  hours 
of  labor  would  not  stop  at  eight  hours,  for  as  the 
producing  power  of  labor  was  increased,  the  process 


THE    AUTOMATIC    SYSTEM  27 

of  shortening  the  hours  of  labor  would  go  right  on. 
Would  it  not  be  better  if  all  men,  while  in  their 
prime,  could  work  a  reasonable  number  of  hours, 
and  reap  the  benefit  of  their  hours  of  labor  by  having 
more  for  themselves,  and  more  for  their  families, 
and  preparing  themselves  for  the  future  by  getting 
a  home  of  their  own  and  like  comforts  1  "Oh !  but, ' ' 
you  say,  "it  is  useless  to  talk  like  that.  Over- 
production can't  be  gotten  around." 

My  friends,  one  of  the  principal  objects  of  this 
book  is  to  show  you  that  over-production  can  be 
gotten  around  and  so  manipulated  as  to  become  a 
great  blessing  to  humanity. 

Then  these  men  have  had  another  idea:  They 
have  formed  labor  unions.  It  is  well  that  they  have 
done  so.  It  shows  that  men  are  thinking,  and  not 
only  thinking,  but  that  they  are  trying  to  do  some- 
thing. However,  looking  at  the  efforts  of  labor 
unions,  we  can  not  help  but  observe  that,  while  they 
have  in  their  ranks  some  very  bright  intellects,  still 
the  intellectual  portion  of  their  forces  comes  into 
play  only  in  organization,  and  in  compromises  and 
arbitrations,  and  when  these  fail,  and  a  strike  is  de- 
clared, and  a  battle  is  actually  on  with  capital,  then 
the  resources  of  the  strikers  are  found  to  consist 
only  of  determination  and  stubborn  endurance,  and 
it  is  readily  seen  that  the  contest  is  an  unequal  one 
and  that  capital  has  the  longer  sword.  The  striker 
may  starve.  The  capitalist  will  not.  Nothing  exists 
without  a  reason  or  cause,  and  the  fact  that  labor 
unions  exist  is  an  indication  that  the  general  laws  of 
the  country  were  not  sufficient  to  protect  the  labor- 
ers, but  that  they  found  it  necessary  to  organize  in 


28  THE    AUTOMATIC    SYSTEM 

order  to  protect  themselves.  While  I  am  not  a 
calamity  howler,  neither  am  I  a  prosperity  howler, 
and  I  must  say  that  if  the  laborers  had  been  generally 
prosperous  there  would  have  been  no  necessity  for 
forming  labor  unions.  The  successful  government 
of  the  future  will  see  that  it  has  so  much  of  the  na- 
ture of  a  labor  union  in  its  own  makeup  that  men 
will  not  be  compelled  to  form  labor  unions  on  their 
own  accord. 

Now,  take  a  group  of  professional  men  and  men 
of  wealth:  When  they  sit  down  and  discuss  these 
same  matters,  you  will  find  that  they  come  no  nearer 
to  an  agreement  than  their  humbler  brothers  do. 
They  speak  of  the  restoration  of  credit  and  of  the 
scarcity  of  good  investments  for  capital,  and  they 
criticize  the  foreign  relations  of  our  country,  and 
draw  wise  conclusions  from  the  fact  that  the  trade 
balance  is  for  or  against  us  with  another  country. 
Some  of  them  are  well  satisfied  and  some  of  them 
agree  that  things  do  not  go  to  suit  them,  but  what 
remedy  do  they  suggest  on  ivhich  they  agree? 

There  has  grown  up  a  class  of  thinkers  who 
claim  to  have  discovered  that  the  trouble  has  not 
been  caused  by  over-production  of  commodities,  but 
that  all  business  stagnation  and  poverty  results  from 
the  fact  that  there  has  been  an  under-production  of 
that  in  which  commodities  are  measured,  to-wit: 
money,  and  that  all  we  have  to  do  is  to  have  more 
money,  and  presto!  commodities  will  change  hands. 
This  set  of  thinkers  is  divided  into  two  classes,  prin- 
cipal of  which  is  the  class  advocating  free  coinage  of 
silver.  The  free  silver  people  make  a  vigorous  claim 
of  being  as  much  in  favor  of  sound  money  as  their 


THE    AUTOMATIC    SYSTEM  29 

opponents  (the  advocates  of  the  gold  standard),  one 
of  the  principal  differences  of  opinion  between  them 
being  that  one  insists  that  the  silver  dollar  under 
free  coinage  would  be  of  equal  value  with  a  gold 
dollar  and  the  other  insists  that  its  value  would  be 
less.  The  second  class  of  those  thinkers  who  are  of 
the  opinion  that  the  trouble  is  caused  by  under- 
production of  money  is  that  class  of  people  known 
as  fiat  money  advocates.  They  are  a  set  of  people 
who  advocate  the  foolish  idea  that  if  a  government 
would  stamp  upon  a  piece  of  paper  a  declaration  to 
the  effect  that  said  piece  of  paper  is  a  dollar,  and 
then  declare  said  dollar  to  be  legal  tender,  that  there- 
upon said  so-called  dollar  would  become  as  valuable 
as  a  gold  dollar.  It  is  plainly  to  be  seen  that  these 
people  would  be  able  to  produce  their  dollar  in  quan- 
tities sufficient  to  cure  the  alleged  under-production 
of  money,  but  it  is  equally  plain  as  to  what  would 
be  the  future  of  a  money  which  had  neither  intrinsic 
nor  representative  value,  and  the  attempted  injec- 
tion into  which  of  a  legal  value  (by  giving  it  an 
equal  debt-paying  ability  with  good  money)  would  in 
the  end  turn  out  to  be  an  operation  as  dishonest  and 
as  ruinous  as  the  watering  of  the  stock  in  any  com- 
pany that  ever  "busted"  and  carried  its  victims  into 
bankruptcy. 

Then  there  is  another  set  of  thinkers.  They  are 
going  to  make  a  great  big  family  affair  out  of  the 
whole  thing  and  live  in  the  community  style.  They 
are  going  to  have  a  learned  doctor  examine  the 
bumps  on  a  man's  head  as  he  grows  up  and  decide 
whether  he  shall  be  allowed  to  waste  his  time  trying 
to  convince  society  that  he  is  a  poet  or  his  energies 


30  THE    AUTOMATIC    SYSTEM 

be  more  properly  used  for  the  benefit  of  society  by 
putting  him  at  work  shoveling  manure  in  a  livery 
stable,  for  which  he  may  be  better  fitted,  according 
to  his  bumps.  They  are  going  to  take  away  every- 
thing a  rich  man  has.  They  are  going  to  disregard 
the  fact  of  any  man  being  less  lazy,  or  having  more 
ability  or  being  more  deserving  than  another  man. 
They  are  going  to  try  to  have  society  progress  as  a 
whole  without  the  individual  citizen  having  any  in- 
centive to  progress ;  in  other  words,  they  are  going  to 
set  a  high-water  mark  for  individual  endeavor,  so 
that  no  man  can  get  up  higher  than  that  mark. 
They  are  going  to  have  a  board  of  managers,  and  a 
great  many  of  those  I  have  talked  with  were  going 
to  be  members  of  that  board.  However,  this  class  of 
thinkers  is  far  from  malicious  in  its  intentions  and 
its  efforts  are  prompted  by  a  sincere  solicitude  for 
the  good  of  society,  while  some  of  the  premises  on 
which  it  bases  its  teachings  are  absolutely  true  and 
unanswerable.  The  world  is  not  ripe  for  the  remedy 
these  men  suggest,  nor  is  the  remedy  which  they 
proi^ose  free  from  features  seriously  ol)jectionable. 
It  is  absolutely  necessary  to  progress  that  the  gov- 
ernment should  fix,  not  a  level  of  jorosperity  higher 
than  which  no  man  can  rise,  hut  a  level  lower  than  which 
no  man  can  fall  and  he  trampled  under  foot,  and  from 
that  level  let  an  independent  and  liberty  loving  peo- 
ple work  out  the  problem  of  individual  prosperity 
and  happiness.  Socialism,  in  the  form  in  which  it  is 
usually  advocated,  suggests  too  sudden  a  change.  It 
ignores  facts.  It  is  a  fact  that  classes  do  exist.  They 
can  not  be  abolished  at  one  blow,  unless  that  blow  is 
one  terrible  in  its  force  and  in  its  consequences.  The 


THE    AUTOMATIC    SYSTEM  31 

better  way  is  to  start  in  and  lift  up  all  classes,  and 
let  the  process  of  lifting  be  continuous,  gradual  and 
sure,  and  let  it  be  done  without  the  pulling  down  of 
classes,  and  without  that  social  disorder  which  has 
always  accompanied  the  latter  method  of  reform. 
The  duties  which  the  remedy  suggested  by  Socialism 
impose  upon  the  citizen,  would  not  at  this  time  be 
regarded  by  the  majority  of  men  as  compatible  with 
the  sense  of  personal  liberty  which  they  value  so 
highly.  Man  has  reached  a  point  in  the  process  of 
evolution  where  (in  the  family  relation)  he  will  ren- 
der services,  for  instance,  to  his  own  father,  and  will 
regard  such  services  simply  as  duty,  and  will  not 
dream  of  complaining  that  such  duty  is  interfering 
with  his  personal  liberties,  even  although  he  has  to 
change  his  own  plans  in  order  to  perform  that  duty, 
but  he  has  not  yet  reached  a  point  where  the  duties 
demanded  by  Socialism  can  be  placed  upon  him  by 
his  government  without  eliciting  his  complaint. 
Mr.  Benjamin  Kidd  in  his  work  on  Social  Evolution 
seems  to  be  of  this  opinion  also. 

Then  we  have  the  anarchist.  He  sometimes 
claims  to  be  a  Socialist,  but  be  it  said  to  the  honor 
of  Socialism,  it  denies  this  claim.  I  may  be  excus- 
able if  I  fail  to  understand  the  prejudice  which  this 
unreasonable  creature  has  against  law  and  govern- 
ment, but,  if  he  can  be  said  to  have  any  ideas  at  all, 
I  suppose  he  operates  on  the  theory  that  it  is  the 
duty  of  those  who  rule  to  please  him,  and  while  he 
is  neither  competent  to  suggest  a  plan  of  ruling  well, 
nor  industrious  enough  to  work  in  a  legitimate  way 
to  put  such  a  plan  into  force  even  if  he  knew  what 
he  wanted,  still  he  goes  on  the  theory  that  by  terror 


32  THE    AUTOMATIC    SYSTEM 

he  will  stimulate  those  who  do  rule  into  devising 
some  plan  of  government  more  suitable  to  his 
anarchistic  tastes.  His  efforts  will  always  recoil  on 
his  own  head. 

Then  we  have  the  Single  Taxers  and  followers 
of  Henry  George  who  tell  us  of  the  great  good  that 
will  result  from  removing  taxation  from  every  form 
of  property  produced  by  labor  and  taxing  land  alone. 
This  class  of  thinkers  has  long  hovered  on  the  out- 
skirts of  a  great  truth,  and  not  far  beyond  the  limits 
of  their  teachings  has  lain  the  secret  of  reducing  the 
subject  of  political  economy  to  an  exact  science. 

Amongst  the  people  composing  all  these  parties, 
as  well  as  amongst  those  belonging  to  the  more  con- 
servative parties  of  the  day,  there  is  growing  in 
favor  the  idea  that  we  should  have  public  ownership 
of  all  our  railroads  and  similar  industries,  and  to  the 
careful  student  of  social  evolution  this  concurrence 
of  opinion  by  so  many  different  classes  of  reformers 
is  significant,  not  only  as  a  hopeful  sign  of  early  ac- 
tion, but  as  indicating  the  probable  direction  the  re- 
form movement  is  about  to  take. 

But  the  fact  that  I  have  been  seeking  to  draw 
your  attention  to  is  that  (with  the  single  exception 
of  public  ownership  just  mentioned)  people  do  not 
know  what  they  want  and  can  not  agree  on  what  is 
best  for  themselves.  If  two  men  can  not  agree  over 
their  pipes,  how  difficult  a  task  it  will  be  for  all  the 
voters  of  the  United  States  to  agree !  Is  it  any  won- 
der that  sometimes  men  falter  in  their  faith  and 
doubtfully  ask  whether  popular  government  is  a  suc- 
cess ?  How  shall  we  unite  the  voters  of  this  country 
on  a  plan  of  improvement?    It  is  evident  that  they 


THE    AUTOMATIC    SYSTEM  33 

must  have  submitted  to  them  by  someone  a  plan  of 
improvement  so  superior  to  any  that  they  have  ever 
read  or  heard  of  that  their  minds  will  instantly  be 
struck  with  its  feasibility  and  good  points — a  plan 
explained  in  such  simple  and  plain  language  that  it 
will  appeal  alike  to  the  philosopher  and  the  fool — a 
plan  that  men  will  see  through  and  understand,  and 
that  will  be  so  desirable  as  to  stop  the  mouth  of  argu- 
ment— a  plan,  the  details  of  which  will  be  so  clear 
and  convincing  and  the  promised  results  of  which 
will  be  so  beneficial  to  rich  and  poor  alike  that  all 
classes  will  instantly  unite  on  it — a  plan  so  practical 
and  so  easily  put  into  operation  by  men  that  no  po- 
litical party  can  safely  oppose  it.  Then,  and  then 
only,  will  men  cease  their  idle  talk.  Then  will  they 
say  to  their  representatives  and  lawmakers:  ''The 
road  lies  before  you,  the  way  is  straight  and  the  door 
is  open.  Why  do  you  not  give  us  this  improvement 
in  government  1 ' '  and  then  will  the  votes  of  men  be 
efficacious  accordingly  as  they  elect  or  do  not  elect 
men  who  will  put  the  plan  which  they  demand  into 
operation.  We  must  all  unite  on  one  single  plan!  We 
must  not  be  divided.  The  interests  of  ninety-nine 
per  cent,  of  us  are  identical,  and  there  is  no  reason 
why  we  should  be  divided. 

I  appreciate  the  fact  that  he  who  attempts  to  lay 
before  the  people  a  plan  which  will  meet  these  re- 
quirements must  be  a  man  whose  patriotism  is  jDure 
and  whose  singleness  of  purpose  is  undoubted,  and 
a  man  whose  love  of  country  and  his  fellowmen  is 
equalled  only  by  his  love  of  truth  and  of  justice,  but 
I  say  to  you  that  in  the  pages  of  this  book  such  a 
plan  is  disclosed  and  that  in  myself  such  a  man 


34  THE    AUTOMATIC    SYSTEM 

exists;  and  all  I  ask  is  that  that  plan  be  put  into 
operation,  and  that  I  be  permitted  to  live  an  humble 
private  citizen  under  that  improved  form  of  gov- 
ernment. 

I  say  to  you  that  there  is  no  reason  why  both 
the  rich  and  the  poor,  the  employers  and  the  em- 
ployed, should  not  be  more  prosperous  in  this  coun- 
try; there  is  no  reason  why  there  should  not  be  the 
highest  co-operation  between  capital  and  labor; 
there  is  no  reason  why  a  man  who  is  willing  to  work 
should  ever  experience  poverty  during  the  whole 
of  his  life  from  the  cradle  to  the  grave;  there  is  no 
reason  why  in  his  childhood  days  he  should  not  have 
proper  food  and  clothing;  there  is  no  reason  why  he 
should  not  go  to  school  properly  clothed  with  com- 
fortable shoes  upon  his  feet;  there  is  no  reason  why 
he  should  not  remain  in  school  until  he  has  received 
a  good  education;  there  is  no  reason  why  in  the  days 
of  his  prime  he  should  not  have  labor  for  every  hour 
that  he  wants  it;  there  is  no  reason  why  he  should 
not  receive  good  pay  for  his  labor;  there  is  no  reason 
why  his  labor  should  not  be  sought  by  capital  as  a 
valuable  thing,  instead  of  begging  for  employment; 
there  is  no  reason  why,  when  ill,  he  should  not  have 
proper  medical  treatment;  there  is  no  reason  why, 
when  married,  he  should  not  have  a  home  of  his  own; 
there  is  no  reason  why  his  life  should  not  be  pleasant, 
and  refinement,  art  and  culture  find  a  place  in  his 
home;  there  is  no  reason  why  he  should  not  be  able 
to  afford  an  occasional  vacation  from  work,  and  he 
and  his  family  take  pleasure  trips ;  there  is  no  reason 
why  he  should  look  forward  to  old  age  with  despair 
or  see  his  children  grow  up  with  doubt;  there  is  no 


THE    AUTOMATIC    SYSTEM  35 

reason  why  any  man  should  have  an  incentive  to  be- 
come a  criminal,  or  any  woman  to  become  a  prosti- 
tute; there  is  no  reason  why  men  should  not  live  to- 
gether in  harmony  and  prosperity,  casting  from 
themselves  those  things  which  in  the  past  have  com- 
bined to  produce  disease  and  crime  and  discord, 
there  is  no  reason  why  mankind  should  not  have  the 
full  benefit  of  machinery  and  the  wheels  of  industry 
turn  faster  and  faster  to  the  advantage  alike  of  cap- 
ital and  labor;  there  is  no  reason  why,  as  the  years 
roll  around,  under  proper  government,  our  land 
should  not  be  filled  with  store  houses,  bursting  their 
walls  with  plenty,  nor  why  the  laborers  who  pro- 
duced that  plenty  should  be  thrown  out  of  work  be- 
cause of  its  existence.  It  has  long  been  accepted  by 
people  as  a  philosophical  truth  that  some  of  us  must 
be  poor.  This  was  true  in  the  days  when  the  produc- 
tive power  of  labor  was  in  its  infancy,  but  I  say  to 
you  in  these  days  when  labor,  by  the  aid  of  machin- 
ery and  scientific  process,  can  produce  much  more 
than  the  requirements  of  the  people  demand,  that 
while  it  is  necessary  for  the  great  majority  of  us  to 
work  and  labor,  yet  there  need  be  not  one  single  man 
who  is  so  poor  as  to  cause  him  to  suffer.  I  say  to  the 
people  of  the  United  States  that  if  they  will  follow 
the  advice  given  them  in  this  book,  they  can  have  the 
blessings,  and  I  say  to  them  further  that  there  is  no 
need  for  a  bloody  revolution  to  accomplish  this  re- 
sult, and  no  need  to  take  from  any  man  that  which 
he  now  holds  title  to  without  making  just  payment 
therefor,  but  that  the  government  need  take  no  steps 
other  than  those  which  are  honest,  just  and  proper. 
I  say  to  you  that  the  people  of  any  country  are 


36  THE    AUTOMATIC    SYSTEM 

strong  and  powerful  and  productive  enough  (if  they 
have  a  proper  system  under  which  to  work)  to  grow 
rich  of  their  own  efforts,  from  the  time  that  system 
is  put  into  operation,  without  demanding  that  any 
rich  man  give  up  something  for  nothing.  Our  rich 
men  are  citizens  and  as  such  they  are  entitled  to  pro- 
tection under  the  law.  We  should  respect  their 
rights  the  same  as  we  do  those  of  a  poor  man,  and  we 
should  do  nothing  except  by  a  vote  of  the  people, 
counting  the  votes  of  the  rich  as  well  as  those  of  the 
poor.  It  is  my  purpose  to  tell  you  how  to  accomplish 
these  results,  not  by  a  far-fetched  plan  requiring  the 
pulling  down  of  our  present  government  and  an  en- 
tire change  in  the  relationship  of  our  citizens,  but  by 
a  plan  which,  though  radical  of  necessity  in  some  of 
its  features,  will  be  found  upon  examination  to  be 
perfectly  practicable  and  one  that  can  be  put  into 
operation  smoothly  and  without  disturbing  the  gen- 
eral run  of  business  and  without  making  any 
changes  other  than  those  which  are  absolutely  neces- 
sary and  indisputably  beneficial.  Having  presented 
to  you  such  a  plan,  I  shall  have  performed  my  duty, 
and  it  will  remain  for  my  fellow  citizens  to  do  the  rest 
with  their  votes.  If  they  are  wise  they  will  not  sit 
down  and  dream  over  this  book  with  the  idea  that 
possibly  their  grandchildren  may  operate  under 
some  such  condition,  but  they  will  take  action  imme- 
diately and  get  the  benefit  of  this  plan  now. 


CHAPTER  III. 

CALLING    ATTENTION    TO    THE    PRINCIPAL    DEFECT    OF 
OUR  PRESENT  COMMERCIAL  SYSTEM. 

Before  calling  your  attention  to  a  cure  for  pres- 
ent disorders,  I  think  best  to  state  to  you  what  is  the 
real  cause  underlying  those  disorders.  The  real 
trouble  is  not  ore/--production  of  commodities,  nor  is 
it  under-pvoduation  of  money.  It  is  simply  a  lack  of 
proper  system.  The  commercial  system  under  which 
we  work  absolutely  produces,  of  its  own  action,  glut 
in  market  and  stagnation  in  trade.  Let  me  ask  you 
something:  When  you  want  to  make  a  profit,  what 
do  you  want  to  make  it  in?  You  want  your  profit  in 
money.  Your  neighbors  are  the  same  way.  The 
wide  world  over  every  man  wants  his  profit  in 
money.  It  is  not  the  man  with  money  who  is  your 
enemy,  but  it  is  money  itself  which  is  the  enemy  not 
only  of  the  laborer,  but  of  his  employer,  for  it  keeps 
both  from  being  better  off.  Now,  don't  understand 
me  as  wanting  to  abolish  money.  I  don't  want  to  do 
anything  of  the  kind.  Don't  jump  at  conclusions. 
Before  I  get  through  you  will  see  that  I  want  you  to 
have  money — not  ridiculous  fiat  money  and  not  ridic- 
ulous gold  or  silver  money,  but  money  a  dollar  of 
which  will  be  easier  to  get  and  will  purchase  more 
than  any  gold  or  silver  dollar  of  today  is  capable  of 
purchasing.  And  don't  think  that  I  am  a  man  with 
one  idea  which  is  going  to  act  as  a  cure  for  all  the 
ills  of  society.  The  fact  is  that  I  shall  herein  suggest 
to  you  laws  on  three  different  subjects  before  I  have 


38931'?' 


38  THE    AUTOMATIC    SYSTEM 

done,  and  you  people  should  sit  quietly  and  give  me 
your  attention.  You  have  been  puzzling  your 
heads  long  enough  and  looking  wise  and  arguing 
around  in  a  circle;  and  it  is  time  that  you  sat  still 
and  let  someone  draw  the  ends  out  of  the  tangled 
mess  you  have  gotten  into. 

Now,  let  us  see  what  over-production  really  is: 
We  have  a  careless  way  of  dividing  society  for  the 
purpose  of  these  discussions  into  two  great  classes, 
i.  e.,  capitalists  and  laborers;  but  for  the  purpose  of 
a  really  intelligent  understanding  of  the  subject,  we 
must  subdivide  capitalists  into  two  classes:  first, 
that  class  which  simply  lends  its  money  and  draws 
interest;  and,  second,  that  class  which  invests  its 
money  in  various  industries  and  which  sometimes 
pays  interest  to  the  first  class.  Having  divided  capi- 
talists into  these  two  classes,  we  find  that  the  second 
class  again  subdivides  itself  into,  first,  a  class  com- 
posed of  comparatively  few  persons  who  are  in  con- 
trol of  public  utilities  of  great  value  and  whose  grasp 
on  the  general  situation  is  becoming  so  powerful  that 
when  they  enter  into  the  ordinary  lines  of  trade,  they 
are  ena])led  by  unlawful  combinations  to  create  ex- 
traordinary and  abnormal  conditions  favorable  to 
themselves  and  absolutely  harmful  to  the  rest  of 
society;  and,  second,  a  class  composed  of  that  great 
body  of  our  citizens  who  are  engaged  in  operating 
legitimate  industries,  both  great  and  small,  and 
whose  energies  and  resources  are  already  being  taxed 
to  the  limit  by  the  manipulations  of  the  combines  or 
trusts  which  I  have  mentioned.  This  last  class  em- 
braces by  far  the  greatest  number  of  individuals  en- 
gaged in  employing  labor,  and  is  a  class  that  would 


THE    AUTOMATIC    SYSTEM  39 

be  of  great  value  to  humanity  under  proper  condi- 
tions, and  it  is  this  last  class  which  I  propose  to  use 
in  illustrating  to  you  how  that  thing  which  we  now 
regard  as  over-production  is  brought  about.  In  other 
words,  I  will  show  you  that  even  if  society  were  rid 
of  those  persons  who  live  off  the  community  by 
drawing  interest  on  their  money  and  those  powerful 
trusts  and  combines  which  have  been  referred  to, 
nevertheless,  the  system  under  which  we  operate,  of 
its  own  action,  would  still  produce  glut  in  market 
and  stagnation  in  trade,  and  every  era  of  prosperity 
would  be  followed  by  its  reactionary  era  of  business 
depression,  sometimes  affecting  the  whole  business 
world  and  sometimes  only  certain  industries.  Let 
me  present  to  you,  briefly,  a  working  model  of  a  com- 
munity composed  of  laborers,  merchants,  farmers, 
manufacturers,  etc.,  all  of  them  legitimate  business 
men,  some  of  them  employed  and  some  of  them  em- 
ployers. Examples  could  l)e  cited  which  would  con- 
tain a  greater  number  of  elements,  but  as  those  addi- 
tional elements  would  only  make  the  proposition 
more  difficult  to  understand  while  the  solution  would 
be  the  same,  consideration  of  simplicity  have  led  me 
to  select  the  following:  We  will  say  that  our  com- 
munity has  twenty  men  who  employ  laborers.  One 
runs  a  coal  mine;  another  a  shoe  factory;  and  so  on, 
all  being  engaged  in  some  useful  line  of  industry. 
Each  employer  has  100  laborers  in  his  employ.  Now, 
in  this  same  little  community  we  will  say  that  there 
are  twenty  merchants  or  storekeepers  dealing  in  va- 
rious kinds  of  merchandise.  It  therefore  follows  that 
we  have  a  community  consisting  of  twenty  manufac- 
turers, etc.,  twenty  storekeepers  and  2,000  laborers. 


40  THE    AUTOMATIC    SYSTEM 

Now,  we  will  start  our  community  with  the  money 
in  the  hands  of  the  manufacturers  or  in  the  hands  of 
the  laborers,  just  as  you  wish,  but  before  we  get 
through  with  our  example  you  will  see  that  the 
money  will  get  into  the  hands  of  the  manufacturers, 
and  that  the  community  will  suffer  from  over-produc- 
tion. During  one  month  the  manufacturers  pay  out 
to  their  2,000  laborers,  we  will  say,  $50.00  each  as 
wages,  or  a  total  of  $100,000.00.  In  addition  they 
pay  for  coal  and  for  raw  material  and  for  other  ex- 
penses, we  will  say,  $50,000.00  amongst  them  all. 
Now,  what  do  these  men  get  for  the  $150,000.00  they 
pay  out?  They  get  the  result  of  labor  in  the  shape 
of  goods.  Now,  do  they  sell  those  goods  for  $150,- 
000.001  No,  Sir!  They  want  a  profit  of  10  per  cent., 
which  on  $150,000.00  amounts  to  $15,000.00.  In 
other  words,  they  want  to  sell  the  goods  produced 
that  month  for  $165,000.00.  Now,  who  buys  the 
goods  from  the  manufacturers!  Well,  in  our  exam- 
ple above  we  have  estimated  that  some  of  them  are 
engaged  in  a  business  in  which  they  sell  coal  or  ma- 
terial or  goods  of  some  kind  to  their  brother  manu- 
facturers, and  we  have  placed  the  amount  thus  dis- 
posed of  at  $50,000.00.  This  leaves  $115,000.00  worth 
of  goods  to  be  disposed  of.  These  are  sold  to  the 
storekeepers.  Now,  what  are  the  storekeepers  going 
to  do  with  these  goods?  They  are  going  to  sell  them 
to  the  laborers.  Will  they  sell  them  to  the  laborers 
for  the  same  amount  that  they  paid  for  them,  to-wit: 
$115,000.00  ?  No !  They  want  a  profit  of  10  per  cent., 
which  on  $115,000.00  amounts  to  $11,500.00.  In  other 
words,  the  storekeepers  want  to  sell  the  goods  for 
$126,500.00.    Now,  who  will  buy  those  goods?    The 


THE    AUTOMATIC    SYSTEM  41 

laborers  will.  Will  they  buy  them?  Most  assuredly 
they  will.  They  need  them.  They  have  children. 
They  are  the  most  numerous  class  in  the  community. 
There  are  2,000  laborers  while  there  are  only  twenty 
manufacturers  and  twenty  storekeepers.  What  will 
the  laborers  buy  the  goods  with?  With  the  money 
they  received  as  wages.  How  much  wages  did  they 
receive  for  that  month?  In  the  aggregate  they  re- 
ceived $100,000.00.  Can  they  buy  $126,500.00  worth 
of  goods  with  $100,000.00?  No.  Who  will  buy  the 
other  $26,500.00  worth  ?  ' '  Well, ' '  you  say,  ' '  I  guess 
the  twenty  manufacturers  and  the  twenty  storekeep- 
ers will  buy  that  much."  If  they  would,  and  do  it 
promptly,  then  everything  would  be  all  right,  but 
they  will  not,  my  friend.  From  the  beginning  of 
mercantile-history  it  has  been  demonstrated  that  they 
will  not.  They  will  buy  what  they  actually  require 
in  their  business  and  (properly)  charge  it  up  to  the 
price  they  are  going  to  ask  for  their  goods,  but  they 
are  very  reluctant  to  spend  or  reinvest  their  profits. 
Almost  every  one  strives  to  accumulate  a  large  cash 
surplus.  Therefore  a  certain  portion  of  the  goods 
produced  in  our  example  given  above  will  not  be  sold, 
and  this  will  be  the  case  each  month,  and  as  the 
months  roll  around  there  will  be  gradually  accumu- 
lated in  warehouses  and  on  shelves  a  large  quantity 
of  goods  which  the  market  reports  and  trade  journals 
will  call  over-production,  because  the  great  consum- 
ing class,  consisting  of  the  common  people  of  the 
community,  can  not  purchase  them.  It  becomes  evi- 
dent that  if  this  system  worked  itself  out  to  the  end, 
and  the  money  were  to  all  lodge  in  the  hands  of  the 
employers  and  not  any  of  it  remain  in  the  hands  of 


42  THE    AUTOMATIC    SYSTEM 

the  laborers,  things  would  tighten  up  so  as  to  almost 
come  to  a  standstill,  for  the  only  consumers  would 
be  the  holders  of  capital ;  but  things  never  reach  this 
stage,  for  as  the  tightening  up  process  goes  on,  it 
comes  in  contact  with  other  natural  laws  which  pre- 
vent the  tendency  of  the  process  from  reaching  a 
consummation.  In  other  words,  it  is  a  fact  that  capi- 
talists in  any  event  require  the  services  of  certain 
kinds  of  laborers,  and  in  that  manner  put  money  into 
circulation,  and  it  is  another  fact  that,  no  matter  how 
much  the  employing  class  desires  to  hoard  money, 
a  great  many  employers  find  that  they  have  them- 
selves fallen  victims  to  the  condition  which  hoarding 
money  has  produced,  and  they  do  such  a  small  busi- 
ness and  make  so  little  profit,  that  in  order  to  live 
and  maintain  their  position  in  society  they  pay  out 
more  than  they  take  in,  and  the  goods  which  they 
hold  in  the  shape  of  over-production  at  such  times 
are  often  sold  by  them  at  such  a  low  price  that  they 
lose  instead  of  making  a  profit,  and  the  consuming 
class  deals  with  them  at  such  times  as  much  as  pos- 
sible, and  the  laborer  may  even  procure  goods  in  this 
manner  at  a  less  price  than  it  cost  to  produce  them. 
It  is  also  a  fact  that  goods  go  out  of  fashion,  and  that 
stocks  grow  old  and  that  fires  occur,  and  other  things 
of  that  kind  occur  which  cause  the  capitalist  to  rein- 
vest, and  thus  loosen  up  the  situation,  and  prevent 
the  grand  centralization  of  capital,  which  is  the  con- 
summation that  would  be  reached,  if  the  tendencies 
of  the  system  under  which  we  work  were  allowed  to 
carry  themselves  to  their  natural  conclusion.  Now, 
my  friends,  this  thing  called  over-production  would 
not  hurt  anything  if  its  owner  regarded  it  as  that 


THE    AUTOMATIC    SYSTEM  43 

much  wealth  and  went  ahead  and  promptly  rein- 
vested his  money  and  re-employed  the  laborers  and 
had  still  more  manufactured.  Over-production  would 
not  hurt  if  a  merchant  would  look  up  at  his  loaded 
shelves  and  say:  "This  is  valuable  stuff.  This  is 
wealth,"  and  instead  of  putting  his  money  in  the 
bank,  would  use  his  surplus  profits  to  buy  more  stock, 
feeling  that  the  manufacturer  would  invest  the 
money  in  labor  and  that  it  would  go  into  circulation 
again  immediately  amongst  the  great  consuming 
class,  and  that  the  laborers  would  come  around  and 
pay  him  (for  such  portion  of  his  stock  as  their 
money  would  buy)  prices  which  would  enable  him 
to  buy  a  larger  and  more  valuable  stock.  If  the  man- 
ufacturer and  the  merchant,  as  a  class,  would  do  as 
the  Bible  tells  them,  and  ''cast  their  bread  upon  the 
waters,"  by  promptly  reinvesting  their  surplus 
profits  in  the  wealth  which  is  produced  by  labor,  the 
laborers  would  surely  carry  out  the  Biblical  proph- 
ecy and  return  the  money  to  them  for  only  a  portion 
of  the  goods  which  they  had  produced  by  their  labor, 
and  the  manufacturers  and  merchants  would  acquire 
more  over-production  and  more  over-production 
until  finally  the  great  quantity  of  goods  that  they 
would  store  away  in  the  shape  of  this  so-called  over- 
production would  be  more  valuable  than  all  the  gold 
and  silver  that  men  can  ever  hope  to  mine,  and  the 
manufacturer  and  the  merchant  would  still  be  cap- 
able of  acquiring  as  large  a  cash  surplus  as  he  now 
has.  He  would  turn  it  over  quicker  than  he  does 
now,  however.  Each  man  would  not  have  to  invest  in  the 
over-production  of  his  own  line  of  industry,  but  he  could 
invest  his  money  in  such  form  of  material  wealth  as 


44  THE    AUTOMATIC    SYSTEM 

he  thought  advisable,  and  other  people  would  have 
the  same  incentive  to  invest  in  his  line.  It  would 
not  matter  what  he  invested  it  in,  just  so  he  invested 
it.  That's  the  main  point.  I  am  aware  that  gold 
and  silver  money  is  itself  a  form  of  material  wealth ; 
but  inasmuch  as  in  its  capacity  as  money  it  possesses 
many  characteristics  not  possessed  by  other  forms 
of  material  wealth,  I  have  felt  justified  throughout 
this  work  in  treating  money  as  forming  a  class  of 
its  own,  distinct  and  separate  from  ordinary  mate- 
rial wealth.  Now,  I  suppose,  my  impatient  reader 
has  about  come  to  the  conclusion  that  what  I  desire 
is  a  law  preventing  a  man  from  making  a  profit  of 
10  per  cent,  on  goods  that  he  handles.  Not  at  all, 
my  friend,  not  at  all.  ''The  laborer  is  worthy  of  his 
hire,"  but  he  is  not  the  only  one.  Manufacturers, 
storekeepers  and  middlemen  all  deserve  to  make  a 
profit,  and  all  I  want  to  do  is  to  give  them  more 
profit,  not  less  profit,  and  I  want  them  to  have  three 
times  as  many  sales  as  they  now  have.  I  want  trade 
to  go  along  in  its  usual  channels,  and  I  want  sales 
to  be  made  for  profit,  and  I  want  the  medium  of  ex- 
change to  be  money,  and  I  want  the  money  to  be  good 
money;  in  fact,  better  money  and  of  higher  purchas- 
ing power  than  any  money  we  have  today;  but  I  do 
not  want  to  work  under  a  commercial  system,  the 
constant  tendency  of  which  is  to  tighten  things  up, 
and  which  requires  failures  and  fires  and  business 
mistakes  to  loosen  it  up,  and  which  moves  slowly  and 
unwillingly,  and  with  a  wear  and  tear  and  an  effort 
and  a  grind,  and  under  which  it  is  plain  that  hu- 
manity lives  at  its  lowest  ebb.  Nor  do  I  want  people 
to  become  foolish  spendthrifts  or  to  become  waste- 


THE    AUTOMATIC    SYSTEM  45 

ful,  and  in  that  connection  I  want  you  to  remember 
that  that  system  is  most  wasteful  under  ivliich  inankind 
as  a  whole  produces  the  least  in  material  wealth,  and  that 
system  is  most  economical  under  which  manhind  as  a 
whole  produces  the  most  in  material  ivealth. 

The  secret  of  the  whole  trouble  is  that  money, 
as  now  constituted,  performs  a  double  function:  It 
is,  first,  a  medium  of  exchange,  and,  second,  a  con- 
venient form  in  which  to  hoard  wealth.  In  its  first  char- 
acteristics it  is  capable  of  the  utmost  usefulness  to 
mankind,  and  in  its  second  characteristic  it  is  di- 
rectly responsible  for  more  of  the  ills  from  which 
humanity  suffers  today  than  any  other  agency.  In 
its  first  capacity  it  is  to  the  world  of  trade  as  the 
easy-going  wheels  are  to  a  wagon,  and  in  its  second 
capacity  it  is  as  if  a  malignant  fate  had  attached  an 
invisible  chain  to  those  wheels  and  laughed  at  the 
efforts  of  men  as  they  forced  the  wagon  along  by 
sheer  strength  and  grit.  In  these  days  science  sepa- 
rates into  their  component  elements  the  very  water 
we  drink  and  the  air  we  breathe,  and  it  is  just  as 
possible  for  scientific  legislation  •  to  remove  from 
money  its  objectionable  features  and  retain  its  desir- 
able characteristics.  But  in  order  to  do  this,  we 
will  have  to  send  men  to  our  legislative  bodies  who 
wish  to  do  it.  They  will  have  to  lose  some  of  the 
oppressive  and  ponderous  statesmanship  which  is  so 
fashionable  today  and  gain  more  of  the  simple  spirit 
of  our  forefathers. 

All  I  advocate  is  a  system  under  which  all  men 
will  reinvest  their  money  and  not  let  it  lie  idle,  or, 
worse  still,  draw  interest  on  it.  If  all  men  insist  on 
having  their  profit  and  their  savings  in  the  shape  of 


46  THE    AUTOMATIC    SYSTEM 

money,  then  the  savings  of  the  entire  world  are  in  a 
great  degree  limited  to  the  amount  of  gold  and  silver 
money  there  is  in  the  world  and  to  those  forms  of 
material  wealth  which  aid  their  owner  in  earning 
money.  Tims  capitalists  will  build  houses  for  people 
to  live  in,  because  they  receive  rent  for  them.  They 
build  lines  of  railroad  and  valuable  machinery  be- 
cause they  make  money  out  of  them,  but  under  our 
present  system  (as  is  the  case  when  over-production 
causes  stagnation  in  certain  lines  of  business),  the 
moment  the  holders  of  money  cease  to  demand  a  cer- 
tain product  or  article  for  purposes  of  present  con- 
sumption that  product  or  article  instantly  becomes 
a  drug  on  the  market,  and  is  regarded  by  all  capi- 
talists as  a  very  undesirable  form  of  wealth  in  which 
to  invest,  and  hence  it  is  that  factories  close  down 
when  this  condition  arises.  "But,"  you  ask,  "why 
should  not  the  production  be  stopped  when  the  de- 
mand has  ceased?"  My  friend,  I  did  not  say  that 
the  demand  had  ceased.  I  spoke  of  "//ze  holders  of 
moneif^  ceasing  to  demand  a  certain  article.  You 
see  a  good  deal  depends  upon  who  are  the  holders  of 
money  at  a  given  time.  If  the  money  is  in  the  hands 
of  the  people  generally  in  sufficient  quantities,  there 
will  be  a  demand  for  much  sugar  and  coffee  and 
shoes  and  cotton  and  woolen  goods,  and  such  things, 
but  if  a  certain  portion  of  the  people  are  out  of  work 
and  receive  no  wages,  and  those  who  do  work  receive 
small  wages,  as  the  result  of  competition  with  those 
who  are  out  of  work,  then  their  capacity  to  demand 
the  kind  of  articles  above  mentioned  will  diminish, 
and  the  capitalists,  who  are  the  principal  holders  of 
money  at  such  times,  will  diminish  their  demand  for 


THE    AUTOMATIC    SYSTEM  47 

laborers,  and  what  is  known  as  a  condition  of  gen- 
eral business  depression  will  ensue,  from  which  the 
business  world  usually  recovers  slowly  after  a  series 
of  failures,  fires  and  famines.  The  entire  material 
wealth  of  the  world  under  our  present  commercial 
system  will  always  be  limited  and  kept  down  by  that 
thing  known  as  over-production  until  we  devise  a 
monetary  system  under  which  it  will  be  more  profit- 
able for  men  to  promptly  reinvest  their  money  in  the 
products  of  labor  than  it  is  for  them  to  hoard  any 
considerable  quantity  of  it.  We  must  arrange  it  so 
there  will  be  a  demand  for  the  products  of  labor 
to  be  hoarded  as  wealth,  even  when  there  are  sufficient 
of  those  products  in  existence  to  satisfy  the  current 
demand  of  consumers. 

Perhaps  instead  of  drawing  your  attention  to 
the  fact  that  the  amount  of  wealth  in  the  world  is  in 
a  great  measure  limited  by  the  amount  of  money  in 
existence  under  our  present  commercial  system,  I 
would  do  better  if  I  drew  your  attention  to  the  great 
amount  of  material  wealth,  the  production  of  which 
is  prevented  by  the  action  of  money.  It  operates  in 
this  way:  Under  our  present  system,  with  the  aid 
of  machinery  and  improved  methods,  the  persons 
engaged  in  almost  every  line  of  industry  are  able  to 
produce  more  than  enough  to  supply  the  current 
needs  of  the  whole  population  for  purposes  of  pres- 
ent consumption.  The  people  engaged  in  all  the 
different  lines  of  industry  would  like  to  have  steady 
employment.  I  say  to  them  that  as  reasonable  per- 
sons they  can  not  expect  to  have  steady  employment 
unless  they  consent  to  demand  goods  and  thus  keep 
the  people  in  other  lines  of  industry  employed  stead- 


4S  THE    AUTOMATIC    SYSTEM 

ily  and  open  up  new  lines  of  industry,  but  under  our 
present  system  the  i^eople  of  no  line  of  industry  will 
consent  to  this.  A  man  gets  his  money  out  of  his 
line  of  production,  and  then  instead  of  investing  all 
of  his  money  in  some  form  of  wealth  other  than 
money  (in  other  words,  in  the  output  of  some  line  of 
production),  he  usually  prefers  to  keep  it  in  the 
shape  of  money.  In  other  words,  instead  of  invest- 
ing the  money  and  keeping  other  people  employed, 
he  says  to  himself:  ''No,  I  want  other  people  to  in- 
vest their  money  in  the  material  wealth  produced  by 
me  and  thus  keep  me  steadily  employed,  but  I  will 
only  reinvest  such  portion  of  my  money  as  I  am 
forced  to  through  necessity,  and  thus  I  will  not  keep 
other  people  employed,  and  then  I  will  put  my  money 
away  so  I  can  let  those  people  starve  now  and  put 
them  to  work  again  just  when  when  I  need  them 
some  time  in  the  future."  Of  course,  this  would  be 
very  nice  if  it  worked  out,  hid  it  does  not  work  out. 
The  people  in  other  lines  of  industry  go  on  the  same 
basis,  and  they  all  help  to  starve  one  another.  This 
book  is  not  written  from  the  standpoint  of  a  moralist, 
and  I  have  no  objection  to  offer  (here)  to  the  man 
who  worships  Mammon,  but  I  want  to  call  his  atten- 
tion to  the  fact  that  he  who  worships  gold  or  silver 
money  is  in  reality  worshipping  not  the  real  Mam- 
mon, but  a  god  that  is  even  much  falser,  for  the  use 
of  those  metals  as  money  in  the  world  of  commerce 
has  prevented  the  production  of  billions  of  dollars' 
worth  of  material  wealth.  It  is  not  a  question  of 
whether  a  man  would  rather  have  a  hundred  dollars 
in  cash  than  in  property,  but  the  real  question  is 
whether  that  hundred  dollars  shall  be  allowed  to  cir- 


THE    AUTOMATIC    SYSTEM  49 

culate  and  stimulate  production  to  the  end  that  all 
men  may  in  time  amass  quantities  of  material  wealth 
many  times  more  valuable  than  the  average  man 
could  hope  to  obtain  in  the  shape  of  money.  We  can 
not  eat  money.  We  can  not  wear  money.  The  most 
useful  purpose  for  which  we  can  use  money  is  as  a 
medium  of  exchange  to  the  end  that  mankind  may 
produce  material  wealth  in  great  quantities  and  ex- 
change it  amongst  themselves  all  over  the  world. 
You  must  remember  that  there  is  hardly  a  line  of 
industry  that  would  support  the  people  engaged  in 
it  unless  those  people  entered  into  exchanges  with 
the  people  engaged  in  other  lines  of  industry.  Thus, 
a  coal  miner  is  one  of  the  most  useful  members  of  so- 
ciety, but,  if  left  to  himself  and  his  coal,  would  per- 
ish in  a  few  days  for  lack  of  food  and  clothing,  which 
he  does  not  produce.  He  would  soon  cease  to  pro- 
duce coal  if  the  rest  of  society  did  not  patronize  his 
line  of  industry,  and  it  is  upon  this  same  principle 
that  the  different  lines  of  industry  grow  dull  and 
shut  down.  The  people  engaged  in  any  line  must  ex- 
change their  products  for  the  products  of  other  lines. 
Our  present  kind  of  money  is  preventing  this.  People  as  a 
whole  are  trying  something  that  is  impossible;  thus 
almost  every  member  of  society  is  trying  to  get 
society  to  take  from  him  all  he  produces  and  give 
him  in  return  money,  and  instead  of  using  this 
money  by  investing  it  in  the  material  wealth  pro- 
duced by  the  rest  of  society,  he  says  to  the  rest  of 
society:  *'I  will  use  of  your  material  wealth  just 
what  I  am  forced  to  through  necessity.  Stop  pro- 
during  your  material  wealth.  When  I  need  a  little 
more  T  will  spend  a  little  more  of  this  money  and  you 


50  THE    AUTOMATIC    SYSTEM 

can  produce  a  little  more."  The  great  majority  of 
people  work  on  this  basis  and  the  production  of  ma- 
terial wealth  is  kept  down,  and,  as  elsewhere  said  in 
this  book,  society  lives  at  its  lowest  ebb.  What 
would  you  think  if  a  family  had  a  valuable  farm  and 
would  only  produce  enough  off  of  it  to  meet  their 
current  wants'?  You  would  say:  ''How  wasteful 
and  foolish."  My  friends,  the  world  is  a  great  big 
valuable  farm.  The  members  of  the  human  family  upon 
it  are  operating  under  a  system  which  tends  to  limit  their 
production  to  just  enough  to  meet  their  current  wants. 
I  say  to  you:    ''How  wasteful  and  foolish!" 

Under  the  jDresent  system  you  can  not  blame 
men  for  holding  to  their  money.  They  have  to  hold 
to  it  for  self -protection.  The  only  time  you  can  ex- 
pect a  man  to  invest  his  money  is  when  he  sees  a 
chance  of  making  a  profit.  Some  men  do  spend  their 
money  freely  to  the  detriment  of  themselves  and 
their  own  families,  but  to  the  great  benefit  of  the 
rest  of  the  world,  and  if  all  men  were  liberal  spend- 
ers within  their  means,  the  world  would  be  better, 
but  if  any  man  or  set  of  men  were  to  operate  on  this 
principle  and  spend  their  money  freely  for  the  prod- 
ucts of  labor  they  would  be  foolish,  because  most  of 
the  people  would  not  co-operate  with  them.  People, 
as  a  general  rule,  will  spend  money  for  just  what 
they  need  to  live  on,  and  just  what  they  need  to 
wear,  and  for  household  furniture,  and  if  a  man  be- 
comes wealthy,  of  course,  he  will  indulge  in  extrava- 
gance to  a  certain  extent,  but  it  never  occurs  to  any 
man  to  put  his  money  into  the  products  of  labor  as 
a  safe  way  of  hoarding  wealth.  He  will  put  his 
money  into  those  products  as  an  investment  if  he 


THE    AUTOMATIC    SYSTEM  51 

can  see  a  sure  profit,  but  not  otherwise.  Under  our 
present  system,  if  all  men  were  good  business  men, 
and  practiced  economy  and  made  no  mistakes,  they 
would  all  have  very  hard  times,  and  would  grind 
each  other  right  down  into  the  earth.  To  a  very 
large  extent,  it  is  the  drunkard,  the  spendthrift,  the 
fool,  the  inexperienced  man — in  other  words,  the 
man  who  takes  the  worst  of  it — that  enables  the  rest 
of  mankind  to  live  and  loosens  up  the  situation  so 
that  the  wheels  of  trade  may  turn.  That  genial 
author  and  scholar,  Mr.  Henry  Fielding,  whose  writ- 
ings show  him  to  have  been  a  man  of  most  liberal 
thought  and  wide  experience,  had  recognized  this 
fact  as  early  as  the  year  1749,  and  in  his  ''History 
of  Tom  Jones,  a  Foundling,"  which  first  appeared 
in  February  of  that  year,  referring  to  the  spend- 
thrift, he  criticizes  humanity  for  the  little  respect 
commonly  paid  to  a  character  "which  really  does 
great  honor  to  human  nature,  and  is  productive  of 
the  highest  good  to  society." 

Now,  as  I  stated  before,  I  do  not  want  the  whole 
world  to  become  spendthrifts,  but  the  sooner  people 
discover  that  there  are  other  forms  of  wealth  besides 
money,  that  much  sooner  will  people  be  relieved 
from  the  heavy  gold  and  silver  heel  that  has  been 
goading  them  on  to  a  struggle  in  which  they  destroy 
one  another — a  struggle  in  which  the  poor  and  the 
weak  are  always  miserable  and  the  rich  and  the 
strong  are  far  from  safe.  I  do  not  mean  that  they  should 
eat  or  drinh  or  smolce  up  everything  that  they  have,  but  if 
all  men  were  forced  to  hoard  their  wealth  in  other 
things  than  money,  then  the  material  wealth  of  the 
world  would  not  be  limited  (as  it  is  at  present),  but 


52  THE    AUTOMATIC    SYSTEM 

the  production  of  material  wealth  would  steadily 
increase,  and  instead  of  being  a  bad  thing,  would  be 
a  good  thing.  Money  w^ould  perform  its  real  work 
as  a  medium  of  exchange,  and  the  wheels  of  industry 
would  hum  and  buzz,  and  the  world  would  grow 
wealthier  every  day.  But  how  shall  we  get  all  men 
to  immediately  reinvest  their  surplus  profits  in  ma- 
terial wealth?  It  is  evident  that  in  their  individual 
capacity  they  will  not  thus  ''cast  their  bread  upon 
the  waters"  and  place  their  reliance  on  things  going 
well.  It  remains  for  the  strong  arm  of  the  govern- 
ment to  present  to  mankind  a  system  under  which  it 
will  be  more  profitable  for  a  man  to  invest  his  money 
than  to  hoard  it.  I  believe  that  all  men  would  spend 
or  invest  their  money,  and,  with  their  families,  live 
comfortably,  if  they  were  assured  that  they  could 
get  more  money  any  time  they  were  willing  to  work, 
or  wished  to  sell  something  in  which  they  had  in- 
vested, and  if  they  did  not  have  such  doubts  about 
their  existence  a  year  or  so  hence.  Over-production 
has  not  yet  reached  a  stage  where  it  can  be  said  to 
be  caused  by  the  fact  that  the  consumers  in  this  coun- 
try do  not  need  the  things  that  are  produced.  While 
it  is  possible  for  the  aid  of  mankind,  with  the  aid  of 
machinery,  to  produce  more  than  mankind  could  pos- 
sibly use,  yet  this  is  not  now  being  done  in  many  in- 
stances. It  may  be  that  at  times  more  has  been  pro- 
duced than  could  be  sold,  but  that  has  been  because 
the  people  could  not  buy  all  they  wanted,  and  even 
those  that  were  able  to  buy  what  they  wanted  did 
not  feel  at  liberty  to  spend  their  money  freely  in 
doing  so.  There  is  a  large  class  of  people  who  do 
not  buy  or  invest  in  anything  unless  it  is  absolutely 


THE    AUTOMATIC    SYSTEM  53 

necessary.  Can  you  not  see  that  the  wheels  of  com- 
merce are  turning  spasmodically  and  with  an  effort? 

Can  you  not  see  that  just  in  proportion  as  men  have  sur- 
rendered to  the  power  of  the  almighty  dollar,  and  have  made 
all  their  efforts  subserve  to  its  acquirement,  just  to  that  ex- 
tent has  the  almighty  dollar  enslaved  and  hound  them  with 
its  golden  chains? 


CHAPTER  IV. 

SHOWING     THE     INEFFICIENCY     OF     VARIOUS     REFORM 
MOVEMENTS      AS      REMEDIES      FOR      THE      DEFECT 
POINTED  OUT  IN  THE  PRECEDING  CHAPTER,  AND 
SUGGESTING  A  PROPER  REMEDY,  CONSIST- 
ING   OF    THREE    CO-OPERATIVE    LAWS, 
RELATING  TO  MONEY,  MACHINERY 
AND  PENSIONS. 

Now,  if  we  were  to  issue  money  (either  gold  or 
silver)  much  faster  than  we  at  present  do  and  in 
larger  quantities,  would  that  correct  the  trouble 
growing  out  of  so-called  over-production,  and  (what 
is  of  more  importance)  would  the  remedy  be  a  per- 
manent one  ?  Mr.  J.  Laurence  Langhlin,  of  scholastic 
fame,  and  a  prolific  writer  on  these  subjects,  in  his 
'' Elements  of  Political  Economy,"  i^ublished  in 
1887,  correctly  states  as  follows:  '**  *  *  value  is 
a  ratio.  The  value  of  money  is  a  relation  of  money 
to  all  things  which  are  exchanged  for  it.  A  change 
in  any  one  of  the  thousands  of  articles  for  which 
money  is  offered  every  day  modifies  the  relation  be- 
tween money  and  other  things."  This  is  true  of 
any  money  based  on  a  commodity,  and  from  this  we 
see  that  our  joresent  money  partakes  of  the  nature 
of  a  commodity,  and  that  the  relation  between  it  and 
other  things  would  also  be  modified  by  a  change  in 
its  own  quantity.  Therefore  if  we  have  a  great  deal 
of  money,  money  will  be  cheap,  and  a  dollar  will  not 
have  as  large  a  purchasing  power  as  formerly.  Out 
of  this  fact  the  free  silver  people  drew  some  of  their 
most  hopeful    conclusions.     They    claimed    that    if 


THE    AUTOMATIC    SYSTEM  5  5 

money  would  go  down  in  value,  like  any  commodity, 
it  would  no  longer  be  desirable  for  men  to  hoard 
money,  but  that  money  going  down  in  value  only 
meant  that  commodities  (other  than  money)  were 
going  up  in  value,  and  therefore,  it  would  be  profit- 
able for  men  with  money  to  invest  their  money  in  all 
sorts  of  such  commodities,  and  the  consequence 
would  be  a  great  boom  in  trade  and  a  ready  market 
for  the  products  of  labor  and  of  the  soil,  and,  that 
therefore,  the  laboring  men  and  the  farmers  would 
prosper,  and  through  them  the  whole  country  would 
prosper.  Now,  suppose  we  admit  that,  at  the  time 
this  change  in  the  purchasing  value  of  money  were 
to  take  place,  there  would  be  improved  conditions 
in  certain  Hues  of  trade.  Does  anyone  really  think 
that  after  the  world  had  adjusted  itself  to  the  new 
value  of  money  that  the  good  times  in  those  certain 
lines  of  trade  would  continue?  Don't  you  know  that, 
even  if  money  were  not  worth  as  much  in  purchasing 
power  as  it  once  had  been,  it  would  still  be  the  thing 
in  which  every  man  would  want  to  take  his  profit, 
and  that  in  a  very  short  time  the  old  conditions 
would  prevail?  But  some  of  my  readers  who  are 
students  of  political  economy  will  have  pricked  up 
their  ears  at  about  this  point,  and  they  will  ask: 
** Didn't  you  tell  us  a  while  ago  that  you  were  going 
to  produce  great  invigoration  in  trade  by  means  of  a 
dollar  that  would  purchase  more  than  any  gold  or 
silver  dollar  of  today,  and  now  have  you  not  just 
admitted  that  perhaps  a  dollar  which  would  pur- 
chase less  would  also  invigorate  certain  lines  of  trade 
for  a  short  time?  Are  you  not  blowing  hot  and  cold 
in  the  same  breath  ?"    My  friends,  if  yon  will  be  pa~ 


66  THE    AUTOMATIC    SYSTHM 

tient,  I  will  explain.  You  see,  the  dollar  I  propose 
to  tell  you  about  is  in  most  respects  a  different  kind 
of  a  dollar  from  any  you  ever  heard  of  before* 

Now,  let  us  suppose  that  the  fiat  money  people 
had  their  way  about  the  thing:  In  the  first  place, 
even  if  their  money  were  good  money,  it  would  be 
subject  to  the  same  objection  as  a  remedy  for  present 
evils  as  free  silver;  and  on  the  other  hand  it  requires 
little  argument  to  convince  one  of  sound  and  logical 
mind  that  fiat  money  is  morally  and  theoretically 
wrong.  It  is  true  that  there  are  a  great  number  of 
debts  owing  in  this  country,  and  that  if  the  United 
States  government  made  such  fiat  money  legal  ten- 
der, the  same  as  gold  for  the  payment  of  this  great 
amount  of  debts,  then  a  certain  quantity  of  fiat 
money  could  be  floated,  but  even  the  floating  of  a 
limited  amount  of  that  fiat  money  would  be  the  same 
operation  that  some  of  our  dishonest  financiers  in- 
dulge in  when  they  ' '  water  the  stock  "  of  a  corpora- 
tion. People  are  becoming  practical  and  business- 
like, and  fiat  money  is  not  the  remedy  they  want. 

Now,  let  us  suppose  that  our  friend  who  has 
ideas  about  reducing  the  hours  of  labor  has  his  way 
about  the  thing:  Is  that  going  to  cure  the  difficulty 
which  arises  out  of  men  taking  their  profits  in  money 
and  hoarding  them?  Not  at  all.  While  the  reduction 
of  hours  of  labor  would  do  some  good  by  giving 


•PUBLISHERS'  NOTE. — At  first  blush,  some  readers  may 
confound  the  money  suggested  by  the  author  in  this  work  with 
the  money  based  on  service  which  has  been  mentioned  by  va- 
rious Socialistic  writers,  but  a  very  slight  examination  will 
convince  them  that  the  taxable  money  here  suggested  is  en- 
tirely new  and  different,  possessing  every  Indication  of  being 
a  practical  success  and  devoid  of  those  ear-marks  of  failure 
which  have  always  accompanied  the  others. 


THE    AUTOMATIC    SYSTEM  5  7 

every  man  a  limited  amount  of  work  for  which  he 
would  receive  a  fair  amount  of  pay,  and  while  the 
hours  of  labor  might  properly  be  shortened  by  law 
to  such  an  extent  as  would  make  them  compatible 
with  the  health  of  the  laborer,  yet,  on  the  other  hand, 
to  shorten  them  to  any  further  extent  would  be 
wasting  the  goodness  of  God  by  wasting  the  produc- 
ing power  of  mankind,  and  it  would  not  prevent 
over-production  because  peoj^le  would  still  make  a 
profit  in  the  form  of  money  which  profit  they  would 
refuse  to  promptly  reinvest  during  glut  in  market, 
as  they  have  always  refused,  and  because  the  labor- 
ers would  still  only  receive  wages  enough  to  pur- 
chase simply  a  portion  of  the  goods  they  had  pro- 
duced, and  because  the  other  portion  of  those  goods 
would  still  be  regarded  by  the  employing  class  as 
over-product io7i  to  he  gotten  rid  of,  instead  of  as  icealth 
of  which  it  luas  desirable  to  quickly  accumulate  more  and 
more,  by  reinvesting  their  surplus  profits  promptly 
and  having  more  jDroduced. 

I  say  to  you  that  what  we  want  is  a  system  by 
which  men  can  not  only  amass  great  quantities  of 
gold  and  silver,  but  such  a  system  as  will  make  them 
also  appreciate  the  value  of  all  the  other  products 
of  labor  (for  you  must  know  that  gold  and  silver  are 
products  of  labor,  being  gotten  out  of  the  earth  and 
refined  by  means  of  labor  and  by  means  of  machinery 
produced  by  labor).  I  want  men  to  hoard  gold  and 
silver  to  their  heart's  content,  for  I  know  it  is  valu- 
able stuff,  but  I  also  want  them  to  have  store  houses 
full  of  goods,  granaries  full  of  grain,  lumber  yards 
full  of  lumber,  orchards  full  of  trees,  pastures  over- 
run with  stock,  land  with  valuable  improvements 


58  THE    AUTOMATIC    SYSTR.M 

Upon  it,  liuuks  and  linen  closets  full  of  clothing  and 
libraries  full  of  books,  as  well  as  valuable  paintings, 
statuary,  jewelry  and  gems.  These  things  have 
value,  and  should  not  be  regarded  as  over-produc- 
tion. I  want  to  see  the  various  factories  in  this 
country  produce  to  their  fullest  extent.  1  want  to 
see  the  people  at  large  prosperous  and  able  to  be  con- 
sumers of  that  production.  After  the  production  is 
up  to  what  it  ought  to  be  in  quantity,  I  want  to  see 
the  quality  begin  to  improve  in  every  article  that 
people  wear,  eat  or  use.  I  want  to  see  good  roads 
and  buildings  and  works  of  art  multiply,  and  new 
industries  opened  up.  I  want  to  see  our  children 
educated  in  the  arts  and  sciences,  and  when  they 
have  received  that  education,  I  want  what  they  pro- 
duce to  be  regarded  as  having  value.  I  w^ant  to  see 
the  houses  which  our  working  people  own  and  rent 
and  in  which  they  live  built  on  better  plans,  and  sur- 
rounded by  larger,  cleaner  and  healthier  grounds. 
I  want  to  see  improvement  and  progress.  The  way 
to  accomplish  this  result  is  by  the  passage  of  several 
laws  which  I  shall  now  present  for  your  consider- 
ation. 

One  of  them  is  a  law  in  favor  of  some  real 
money — not  gold  and  silver  money,  and  not  fiat 
money — but  real  money — money  which,  in  addition 
to  possessing  many  other  advantages  and  good 
points,  would  be  a  money  based  upon  labor,  which  is 
a  thing  the  relation  of  which  to  the  population 
always  remains  the  same,  and  any  variation  of  the 
value  of  which  money  with  reference  to  any  of  the 
thousands  of  articles  measured  in  it  would  be  caused 
by  such  natural  phenomena  as  properly  affects  those 


THE    AUTOMATIC    SYSTEM  59 

various  articles,  and  would  not  be  caused  by  any  va- 
riation in  the  value  of  the  money  itself,  which  would 
remain  a  stationary  standard  of  value,  to  which  other 
things  would  adjust  themselves  in  accordance  with 
those  natural  laws  which  govern  value.     Did  you 
ever  reflect  that,  if  the  production  of  gold  were  to  be 
suddenly  augmented  nine  or  ten  hundred  per  cent,  by 
the  discovery  of  some  new  process  or  rich  fields,  the 
purchasing  value  of  our  present  money  would  be  so 
reduced  as  to  ruin  every  man  whose  estate  consisted 
of  money?    The  only  man  who  would  be  unaffected 
would  be  the  man  whose  wealth  consisted  not  of 
money,  but  of  land,  or  of  the  material  wealth  of  the 
world  consisting  of  the  products  of  labor.     Well, 
there  might  be  another  man  who  would  weather  the 
storm.    That  would  be  the  man  who  had  wits  enough 
about  him  to  go  around  to  the  postoffice  and  put  all 
of  his  money  into  j^ostage  stamps,  and  the  govern- 
ment itself  would  have  to  stop  the  sale  of  postage 
stamps  under  the  present  postal  rates  to  keep  from 
losing  heavily  by  this  source,  or  else,  later  on,  violate 
its  implied  contract  by  refusing  to  honor  the  stamps 
at  the  postal  rates  that  prevailed  on  the  day  of  sale. 
Those    stamps    would    have    marked    upon    them 
*'2  cents,"  but  while  every  other  kind  of  2  cents  in 
the  world  would  have  fallen  in  actual  purchasing 
value,  those  postage  stamps  would  remain  the  same 
in  purchasing  value    (if  the  government  kept   its 
faith)  because  those  postage  stamps  would  be  redeem- 
ahle  in  labor.    In  other  words,  the  United  States  gov- 
ernment, through  its  mail  department,  would  stand 
ready  to  render  service  for  those  stamps. 


60  THK    AUTOMATIC    8Y8THM 

This  law  in  reference  to  money  would  provide 
that  the  national  government  should  (by  purchase) 
take  charge  of  all  public  utilities,  consisting  of  rail- 
roads, steamboats,  bridges,  street  car  lines,  water 
works  systems,  telegi'aph  and  telephone  systems,  gas 
and  electric  systems,  etc.  It  would  also  provide  for 
an  automatic  tax  on  money,  which  money  would  be 
of  the  new  kind  hereinafter  mentioned. 

The  second  of  these  laws  is  a  law  witli  reference 
to  machinery. 

The  third  law  is  one  with  reference  to  pensions. 

I  will  now  explain  these  various  proposed  meas- 
ures in  their  entirety,  and  when  I  have  done  so,  I 
think  you  will  believe  in  them;  nor  do  I  believe  that 
any  teacher  of  political  economy  the  world  over  will 
be  able  to  change  your  opinion  on  the  subject  after 
you  have  once  thoroughly  digested  the  matter,  and 
especially  after  you  have  read  the  application  of 
these  proposed  laws  to  existing  conditions  contained 
in  the  latter  portion  of  this  book. 

These  laws  must  be  laws  of  the  national  govern- 
ment.* It  will  not  do  for  any  state  or  community 
to  try  to  cope  with  the  situation  alone.  Your  vote 
may  do  some  good  in  your  own  commimity  in  the 
way  of  filling  your  public  offices  with  good  and  hon- 
est men,  and  in  the  way  of  having  your  local  govern- 
ment properly  administered,  and  of  sending  honest 
men  to  your  state  legislatures  and  municipal  coun- 
cils; but  I  say  to  you  that  the  situation  is  too  large 


*The  recent  utterances  of  our  distinguished  President, 
Mr.  Roosevelt,  indicate  that  he  is  strongly  of  the  belief  that 
laws  dealing  with  the  commercial  situation,  In  order  to  produce 
proper  results,  should  be  laws  of  the  national  government. 


THE    AUTOMATIC    SYSTEM  61 

to  be  coped  with  by  any  state  or  small  community. 
A  community  or  a  state  may  be  managed  all  right 
within  itself,  and  yet  it  will  have  many  unprosper- 
ous  citizens,  because  of  the  fact  that  influences  from 
without  which  are  far-reaching  and  beyond  the  con- 
trol of  the  community  or  of  the  state  are  at  work  and 
have  a  bearing  upon  the  affairs  of  its  citizens,  and 
hence  it  is  that  the  strong  arm  of  the  national  gov- 
ernment must  take  some  action. 


CHAPTER  V. 

A   DESCRIPTION  AND  PARTIAL  DISCUSSION   OF   THE 
PROPOSED  LAW  RELATING  TO  MONEY. 

The  government  must  not  only  take  possession 
(by  enforced  purchase)  of  those  railroads  that  go 
from  one  state  to  another,  but  it  must  also  purchase 
those  railroads  and  street  railways  that  have  their 
lines  entirely  within  any  one  state.  Exercising  the 
i-ight  of  eminent  domain  in  behalf  of  the  public,  it 
must  purchase  all  water  works  systems,  all  telegraph 
and  telephone  systems,  all  gas  and  electric  light, 
power  and  heating  systems,  all  coal  mines,  etc.,  and 
it  must  pay  to  the  men  and  corporations  who  now 
own  them  the  just  value  thereof.  This  is  a  large 
purchase  for  the  government  to  make,  and  will  re- 
quire the  issuance  of  bonds.  The  signs  of  the  times 
point  unmistakably  to  the  fact  that  this  move  must 
sooner  or  later  be  made  by  the  government,  and  the 
sooner  it  is  done,  the  easier  will  be  the  task. 

What  has  gone  before  in  this  book  will  have 
suggested  to  your  mind,  as  has  been  my  intention 
that  it  should  do,  that  what  we  need  among  other 
things  is  a  different  kind  of  money.  It  is  evident 
that  we  need  a  money,  the  current  purchasing  value 
of  which  and  the  commercial  need  for  which  will  be 
such  that  people  will  strive  to  get  it  just  as  they  do 
our  present  kind  of  money,  and  yet  this  money  will 
have  to  be  of  such  a  nature  that  men  will  not  want 
to  cling  to  it  or  hoard  it.  To  produce  this  result,  the 
money  will  have  to  decrease  slightly  in  value  every 


THE    AUTOMATIC    SYSTEM  63 

month,  and  it  is  also  apparent  that  this  lessening  in 
value  must  not  be  accomplished  by  means  of  any 
real  waste,  but  that  whatever  the  holder  of  the  money 
loses  in  its  value,  instead  of  being  wasted,  should 
remain  in  existence  and  be  applied  to  the  benefit  of 
society  at  large,  and  it  is  also  apparent  that,  in  order 
to  be  practicable,  any  decrease  in  the  value  of  the 
money  each  month  should  not  result  in  the  money  in 
the  hands  of  the  people  becoming  of  different  and 
irregular  denominations  or  value,  nor  being  one 
month  of  less  general  value  than  it  was  the  preceding 
month,  but  all  the  money  in  circulation  will  have  to 
be  of  definite  and  regular  denomination  and  value. 
A  solution  of  this  problem  will  be  found  in  simple 
and  satisfactory  form  by  an  examination  of  the  kind 
of  money  I  am  about  to  present  to  you. 

When  the  government  becomes  the  owner  and 
manager  of  the  different  industries  heretofore  men- 
tioned, it  should  demonetize  both  gold  and  silver.  A 
large  number  of  people  today  say  that  gold  acquires 
no  value  from  being  money,  but  that  the  whole  value 
of  gold  is  its  intrinsic  value.  If  they  are  right,  no 
gold  interest  will  be  damaged  by  the  demonetization 
of  gold,  because  gold  will  still  be  just  as  valuable  and 
people  can  still  get  it,  and  hoard  it,  and  enter  into 
contracts  to  furnish  it  and  to  be  furnished  with  it. 

Having  demonetized  gold  and  silver,  the  govern- 
ment should  issue  a  kind  of  money,  a  dollar  of  which 
would  read  as  follows: 

"Washington,  D.  C, (Date) 

The (government) hereby  promises 

to  pay  to  the  holder  hereof,  if  applied  for  at  the  proper  place 
according  to  law  during  the  month  above  mentioned,  one 
dollar's  worth  of  service  in  its  postoffice.  telegraph,  telephone, 


«4  THE    AUTOMATIC    SYSTEM 

railroad,  street  railway,  steamship,  water  rates,  light  or  heating 
department,  or  In  the  goods  or  service  of  any  other  Industry 
which  said (government) may  own  and  con- 
trol at  the  time  this  dollar  shall  be  presented  for  payment. 
Said  payment  shall  be  made  at  the  rate  fixed  by  the  Depart- 
ment of  Industry  for  the  current  month.  This  dollar  Is  legal 
tender  during  the  month  for  which  it  is  Issued  for  all  taxes  and 
impost  duties  and  all  debts,  public  or  private,  in  all  territory 

subject  to  the  laws  of  the (government) 

"If  the  holder  hereof  does  not  desire  to  have  this  obligation 
redeemed  in  goods  or  service  during  the  month  for  which  it  is 
issued,  he  must,  at  the  end  of  such  month,  have  it  redeemed  in 
the  money  of  the  next  month,  less  the  tax  provided  by  law,  and 
he  is  hereby  cautioned  that  if  he  fails  to  present  the  same 
within  the  first  three  days  of  such  next  month,  it  will  be  sub- 
ject to  an  increased  penalty  tax  as  provided  by  law. 


"Secretary  of  the  Treasury." 
Here  is  a  paper  dollar  that  would  be  as  valuable 
as  any  paper  dollar  we  have  today  promising  to  pay 
gold  or  silver,  because  it  promises  to  perform  labor, 
and  a  promise  to  perform  labor  is  just  as  valuable 
as  a  promise  to  pay  gold  or  silver,  but,  on  other 
grounds  than  that,  this  dollar  would  be  more  valu- 
able than  any  gold,  silver  or  paper  dollar  we  have 
today,  for  the  reason  that  this  dollar  would  purchase 
more  than  a  dollar  now  purchases.  Why  should  it? 
Because  the  United  States  of  America  would  run  all 
these  industries,  just  the  same  as  it  now  runs  its 
opstoffice  department.  It  would  not  try  to  make  a 
large  profit  on  its  different  lines  of  business.  All  it 
would  want  would  be  a  slight  margin  of  safety  over 
and  above  running  expenses,  and  you  can,  therefore, 
readily  see  that  a  railroad  company,  a  gas  company 
jmd  a  wattr  works  company  run  by  the  United 
States  government  would  give  more  for  a  dollar  than 
a  railroad  company,  a  gas  company  or  a  water  works 


THE    AUTOMATIC    SYSTEM  65 

company  gives  today,  when  it  is  run  by  some  profit- 
making  monopoly  or  trust.    Do  you  catch  the  idea? 

''Oh,  but,"  you  say,  "if  we  can  have  money  in 
that  manner,  why  not  issue  a  lot  of  it,  and  make  mil- 
lionaires of  us  all?" 

Now,  my  friend,  be  sensible.  If  a  savage  were  to 
take  an  umbrella  and  hold  it  over  his  head  during  a 
rainstorm,  he  might  say  an  umbrella  was  a  good 
thing,  but  if  he  walked  along  in  the  rain  dragging 
the  umbrella  under  foot,  he  would  say  that  an  um- 
brella was  no  good  for  rain.  In  other  words,  in 
order  to  get  the  benefit  of  the  umbrella,  he  would 
have  to  use  it  in  a  proper  manner.  So  it  is  with  this 
monetary  system  that  I  propose.  The  government 
•will  have  to  make  a  proper  use  of  it.  What  would 
you  think  of  a  common,  ordinary  little  one-horse 
milk  company  that  had  been  in  the  habit  of  doing 
business  in  one  of  your  cities,  using  milk  tickets  in 
the  business,  if  that  company  were  to  suddenly  go  to 
work  and  give  everybody  in  town  a  thousand  dollars' 
worth  of  milk  tickets  free  of  charge  ?  Of  course,  the 
company  would  not  be  able  to  redeem  the  tickets. 
But  no  milk  company  is  going  to  be  foolish  enough 
to  do  this,  and  I  don't  think  the  United  States  gov- 
ernment will  do  it,  as  I  assume  that  the  affairs  of 
the  government  will  always  be  in  charge  of  men  who 
have  intelligence  to  run  an  ordinary  milk  wagon. 

"But,"  you  say,  "the  people  would  hoard  this 
money  just  the  same  as  any  other  and  it  would  all 
get  out  of  circulation  by  being  centralized  in  the 
hands  of  the  capitalists,  and  we  would  have  to  have 
more  and  more  issued  all  the  time,  and,  finally,  there 
would  be  a  great  amount  outstanding,  as  an  obliga- 


66  THE    AUTOMATIC    SYSTEM 

tiou  against  the  govermnent,  and  it  would  decrease 
in  value  and  ultimately  involve  the  government  in 
financial  ruin." 

No,  my  friend,  the  government  of  the  future  will 
be  too  vigilant  for  anything  of  that  kind.  There  will 
be  a  law  taxing  money  automatically.  I  have  for  a 
number  of  years  been  trying  to  drum  into  the  heads 
of  my  friends  the  fact  that  money  is  the  belting 
which  turns  the  wheels  of  commerce,  and  that  no  one 
should  be  allowed  to  roll  it  up  and  put  it  away  and 
spring  it  on  us  when  it  can  do  the  most  damage. 
The  government  of  the  future  will  tax  money,  so 
that  if  any  man  hoards  his  money  instead  of  putting 
it  into  the  channels  of  trade,  he  will  gradually  lose 
his  money. 

"Well,"  you  say,  "that's  nothing  new.  The 
different  states  and  counties  and  cities  tax  money 
right  now  as  part  of  a  man's  personal  property  tax, 
and  that  does  not  keep  men  from  hoarding  money, 
nor  do  men  return  a  full  valuation  into  the  assessor's 
office." 

Why,  my  friend,  you  are  thinking  of  the  old- 
fashioned  method  of  taxing  money  in  vogue  now. 
The  government  of  the  future  will  be  too  shrewd  to 
tax  money  by  simply  asking  a  man  to  hold  up  his 
hand  and  swear  to  how  much  money  he  has  once  a 
year.  That  way  of  taxing  money  will  not  do,  because 
the  man  who  does  the  swearing  always  thinks  some 
other  man  ought  to  pay  the  tax.  I  remember  a  good, 
old-fashioned,  hard-working  and  self-respecting 
neighbor  of  mine  who  at  one  time  got  me  quite  ex- 
cited and  worked  up  by  a  harangue  which  he  deliv- 
ered to  me  over  the  top  of  his  front  fence  on  the 


THE    AUTOMATIC    SYSTEM  67 

subject  of  street  ear  corporations  not  paying  taxes 
on  a  large  enough  valuation  and  not  carrying  licenses 
for  all  their  cars.  As  he  turned  to  go  in  his  house  he 
anxiously  whistled  to  an  ugly  bull  pup  that  had  wan- 
dered out  of  his  yard,  and  as  the  dog  darted  through 
the  opened  and  closed  gate  very  innocently  and 
blandly  remarked  to  me  that  he  didn't  like  the  dog 
to  run  on  the  street,  as  it  had  no  license  tag  and  he 
was  afraid  the  dog-catcher  might  nab  it.  No,  the 
government  of  the  future  will  not  tax  money  in  that 
way.  It  will  collect  taxes  automatically  on  every 
cent  of  its  money,  because  if  a  man  holds  out  his 
money  and  does  not  pay  the  tax  on  it,  the  money 
itself  will  disclose  this  fact,  and  the  most  ignorant 
washer-woman  or  unposted  Chinaman  in  the  country 
will  be  able  to  see  that  it  is  not  of  full  face  value. 
The  government  will  require  every  man  (or  his 
banker  for  him)  to  take  his  money  on  the  first  of 
every  month  to  the  postoffice,  or  such  place  as  shall 
be  provided,  where  there  will  be  a  force  of  clerks  on 
hand  to  wait  upon  him.  Now,  suppose  that  I  am  one 
of  the  clerks  and  you  are  the  fortunate  possessor  of 
the  money  that  is  going  to  be  taxed.  1  shall  say  to 
you:  "How  much  have  you!"  You  will  lay  down 
your  money  (for  instance,  $4-1.00)  and  will  say: 
''Forty-four  dollars."  I  shall  pick  it  up  and  say: 
' '  That 's  correct.  One  per  cent,  of  $44.00  is  44  cents. 
You  are  entitled  to  the  other  99  per  cent.,  which 
amounts  to  $43.56.  How  do  you  want  it?"  You  will 
probably  answer  me:  "Two  tens,  four  fives  and  the 
rest  in  change."  T  shall  thereupon  hand  you  two 
ten-dollar  bills,  four  five-dollar  bills,  three  one-dollar 
bills  and  56  cents  in  smaller  money  of  paper.    You 


68  THE    AUTOMATIC    8T8THM 

will  say:  '*It  looks  like  it's  going  to  rain,"  and  I 
shall  say:  ''Yes,  it  does,"  and  I  shall  turn  your  old 
money  over  to  the  government  to  be  destroyed,  and 
the  government  will  get,  by  way  of  taxation,  the 
other  44  cents  of  new  money  which  you  did  not  get. 
Now,  if  you  will  look  at  your  $43.56  of  new  money, 
you  will  see  that  it  is  different  in  date,  color  and  de- 
sign from  the  old  money.  The  government  will  have 
different  colors  and  designs  for  the  different  months, 
so  that  the  most  ignorant  man  in  the  country  can  i^er- 
ceive  at  a  glance,  when  you  offer  him  money,  whether 
he  is  getting  money  that  has  been  taxed  or  not,  and 
if  a  man  is  behind  time  in  getting  his  money  down 
to  be  taxed,  it  will  no  longer  be  of  face  value  or  legal 
tender,  and  no  one  will  be  willing  to  receive  it  from 
him  except  the  government,  which  will  redeem  it  by 
charging  him  a  tax  of  2  per  cent,  a  month  instead  of 
1  per  cent.  So,  you  see,  the  government  of  the  future 
will  know-how  to  collect  its  tax  on  money. 

Now,  if  you  are  a  man  out  of  work,  when  we 
have  this  kind  of  money,  you  will  soon  get  work, 
because  a  man  who  has  an  income  of  $1,000.00  a 
month  will  spend,  as  he  does  now,  say  $200.00  in  his 
living  expenses,  and  then,  instead  of  hoarding  the 
other  $800.00,  or  being  able  to  put  it  out  at  interest, 
he  will  have  to  pay  interest  for  the  privilege  of 
hoarding  it,  and  hence,  rather  than  do  that,  he  will 
spend  it,  and  put  it  in  the  shape  of  cattle,  or  wheat  or 
some  product  of  labor,  on  which  he  will  not  have  to 
pay  any  taxes  under  the  government  of  the  future. 
Of  course,  when  the  law  first  goes  into  effect,  prob- 
ably the  first  thing  that  rich  men  will  invest  their 
surplus  money  in  will  be  gold  and  silver,  but  don't 


THE    AUTOMATIC    SYSTEM  69 


let  that  bother  you.  It  will  not  take  them  long  to  get 
a  comer  on  that,  because,  to  tell  you  a  secret,  they 
now  own  about  all  of  it  there  is  in  existence,  and  can 
call  it  out  of  circulation  any  time  they  desire.  You 
can  see  that,  of  necessity,  men  will  soon  take  to  try- 
ing to  get  rich  by  giving  laborers  work  and  contin- 
ually reinvesting  their  surplus  profits  in  the  products 
of  labor,  and,  if  they  show  too  big  a  disposition  to 
invest  in  land,  Henry  George  and  the  Single  Taxers 
have  suggested  the  proper  remedy.  When  the  prod- 
ucts of  labor  become  the  most  desirable  form  in 
which  men  can  hoard  wealth,  then  the  laborer  will 
get  work.  Now,  a  laborer  usually  spends  most  of 
his  money  to  live  on,  and  at  the  end  of  the  month  he 
will  not  have  a  very  large  amount  to  pay  taxes  on. 
If  the  amount  he  has  left  is  $20.00,  the  tax  on  it  will 
amount  to  20  cents.  But  a  man  who  has  a  large  in- 
come, while  he  may  live  nearly  as  cheaply  as  a 
laborer  does,  will  have  to  pay  taxes  on  all  the  surplus 
money  which  he  attempts  to  hoard,  and  he  will  not 
hoard  it.  He  will  invest  it.  What  you  want  is  a 
money  that  is  useful  in  the  channels  of  trade  and 
keeps  moving.  Then  you  will  find  out  that  it  was  not, 
after  all,  a  large  quantity  of  money  that  was  wanted, 
but  simply  a  reasonable  quantity  of  the  right  kind 
of  money — in  other  words,  real  money — money  that 
takes  labor,  which  is  the  only  thing  that  produces 
wealth,  and  puts  that  labor  in  the- pi  ace  that  gold  has 
occupied  for  too  long  a  time.  To  what  a  sorrowful 
state  have  things  come  when  we  hear  upon  the  lips 
of  civilized  men  and  women  such  an  expression  as 
'  *  pauper  labor ! "  I  would  just  as  soon  hear  a  man 
accuse  his  own  sister  of  dishonor  as  to  hear  him  call 


70  THE    AUTOMATIC    SYSTEM 

labor  a  pauper!  Labor  should  not  be  a  pauper,  for 
she  is  the  Goddess  to  whom  all  men  must  go  for  their 
riches!  God  from  on  high  has  endowed  her  with  a 
wand  of  almost  infinite  potency.  With  it  she  strikes 
upon  the  mountains  and  they  crumble;  she  points  to 
the  sea  and  its  waters  recede  and  dikes  and  new  land 
take  its  place;  she  stirs  the  sands  of  the  desert  and 
they  bloom  as  a  garden,  and,  delving  deeper,  the  very 
bowels  of  the  earth  give  up  their  treasures.  Oh, 
Labor,  if  thou  art  indeed  a  pauper,  how  dishonest 
have  been  thine  enemies!  How  incompetent  thy 
priests!  I  say  to  you  that  if  Labor  is  a  pauper,  the 
time  has  come  when  we  must  put  a  stop  to  the  loot- 
ing of  her  shrine  and  the  mismanagement  of  her  re- 
sources. 

But  at  present  I  shall  not  dwell  too  long  upon 
this  part  of  my  plan.  I  shall  go  on  and  explain  to 
you  the  working  of  the  laws  with  reference  to  ma- 
chinery and  with  reference  to  pensions  which  I  say 
that  men  should  have. 


CHAPTER  VI. 

A  DESCRIPTION  AND  PARTIAL  DISCUSSION  OF  THE  PRO- 
POSED LAW  RELATING  TO  TAXING  LABOR  WHEN 
DONE  BY  MACHINERY. 

Heretofore  the  favorite  remedies  suggested  as 
a  solution  of  the  machinery  problem  have  been 
shorter  hours  of  labor  and  the  plan  of  living  as  a 
great  family  in  communities.  The  first  plan  would 
be  an  unnecessary  waste  of  human  energy,  and  the 
second  plan  would  operate  to  thwart  all  personal 
liberty  and  individual  ambition.  By  the  plan  I  sug- 
gest, all  men  can  get  the  benefit  of  machinery  and 
still  live  just  as  they  do  today,  without  making  any 
great  change  in  affairs  at  all.  There  should  be  added 
to  the  duties  of  the  patent  office  at  Washington  the 
duty  of  declaring  whether  or  not  an  invention  is 
labor  saving  in  its  nature.  Of  course,  there  are  many 
useful  little  devices  invented  that  are  not  labor  sav- 
ing, such  as  pen  holders,  smoking  pipes,  stoves,  etc., 
and  then  again,  there  are  other  little  mechanical  con- 
trivances which,  although  essentially  labor  saving  in 
their  nature,  still  do  not  belong  to  that  class  of  ma- 
chinery which  has  become  so  dangerous  by  displac- 
ing labor  and  by  reducing  the  grade  of  the  laborer 
from  that  of  a  skilled  workman  to  that  of  a  common 
machine  hand.  Thus,  a  corkscrew  may  be  said  to  be 
labor  saving,  but  it  would  not  come  under  the  class 
of  machines  which  mankind  wants  controlled.  One 
of  those  small  sausage  grinders  which  the  housewife 


72  THE    AUTOMATIC    SYSTEM 

fastens  to  her  kitchen  table  and  uses  in  the  prepara- 
tion of  mincemeat  and  Hamburger  steak  may  be 
said  to  be  labor  saving,  but  it  would  not  come  under 
the  class  of  machinery  that  is  menacing  the  laborer 
of  today;  nor  would  it  be  desirable  to  include  in  the 
classification  to  be  controlled  any  labor-saving  ma- 
chine or  tool  which  is  designed  to  be  used  in  every 
household  or  to  become  part  of  the  kit  of  tools  of  the 
individual  workman  in  any  trade,  for  it  is  plainly 
to  be  seen  that  men  already  receive  the  full  benefit  in 
a  general  way  of  that  class  of  labor-saving  machines 
and  tools.  But  when  the  patent  ofiice  at  Washington 
(or  some  commission  appointed  for  the  purpose) 
shall  decide  that  a  machine  is  of  such  a  labor-saving 
nature  as  to  do  a  certain  amount  of  work  with  less 
men  than  theretofore,  or  as  to  do  a  larger  amount  of 
work  with  the  same  number  of  men,  or  of  such  auto- 
matic nature  as  to  disjDlace  the  labor  of  man  entirely, 
or  as  to  reduce  the  grade  of  the  men  employed  about 
it  from  skilled  to  unskilled  labor,  either  in  the  fac- 
tory, the  mill,  the  slaughter  house,  the  foundry,  the 
mine,  or  in  any  other  line  of  industry  employing 
labor,  then  it  shall  be  the  duty  of  such  patent  office 
or  commission  to  so  declare  and  to  say  to  the  in- 
ventor of  that  machine :  ' '  The  United  States  govern- 
ment will  exercise  a  supervision  over  the  manufac- 
ture of  that  machine  for  you  as  long  as  there  is  any 
demand  for  its  use,  and  the  government  will  collect 
a  rental  tax  on  it  from  such  manufacturers  as  want  to 
use  it,  and  will  pay  you  (the  inventor)  a  certain  per- 
centage of  the  first  $10,000  of  rent  which  the  govern- 
ment receives  per  year  for  it,  and  a  certain  smaller 


THE    AUTOMATIC    SYSTEM  7S 

percentage  of  all  over  $10,000  per  year  which  it  re- 
ceives as  rent. ' '   Now,  let  us  see  how  this  would  work 
out:    We  will  say  that  a  machine  is  invented,  by  the 
use  of  which  a  man  in  a  shoe  factory,  who  could  for- 
merly turn  out  five  pairs  of  shoes  a  day,  could,  with 
the  aid  of  the  new  machine,  turn  out  ten  pairs  of 
shoes  a  day.  It  is  evident  that  the  shoe  factory  would 
formerly  have  had  to  pay  two  workmen  for  produc- 
ing ten  pairs  of  shoes  in  a  day,  which  ten  pairs  of 
shoes  they  now  procure  by  paying  only  one  workman 
for  a  day.    Therefore  the  shoe  factory,  by  the  use 
of  this  machine,  gains  the  labor  of  one  man  per  day 
on  each  machine  of  the  new  kind  that  it  puts  into 
operation,  or  a  total  gain  of  365  days  of  labor  per 
year  for  each  machine.    Of  course,  the  cost  of  main- 
taining and  operating  the  new  machine,  as  compared 
with  the  cost  of  maintaining  and  operating  the  old 
machine,  or  process  theretofore  used,  would  have  to 
be  computed  also  in  order  to  arrive  at  the  exact 
amount  gained  by  using  the  new  machine.    But  we 
are  principally  interested  in  the  labor  saved  by  the 
machine.    Now,  if  the  government  were  to  charge  as 
rent  for  the  machine  an  amount  equal  to  the  amount 
it  saves  the  shoe  factory  in  wages,  etc.,  there  would, 
of  course,  be  no  incentive  for  the  factory  to  use  the 
machine,  and  neither  the  inventor,  the  proprietor  of 
the  factory,  nor  anyone  else  would  receive  any  bene- 
fit from  the  machine,  if  not  used.    If,  however,  the 
government  would  charge  a  rental  equal  to  one-half 
the  labor-saving  value  of  the  machine,  then  the  shoe 
factory,  which  could  not  get  the  machine  in  any 
other  way,  would  be  glad  to  pay  the  government  that 


74  THE    AUTOMATIC    SYSTEM 

amount.  "But,"  you  say,  "while  I  can  not  at  pres- 
ent see  what  good  it  would  do  for  the  government  to 
get  this  rent,  there  is  another  thing  to  be  considered. 
The  different  countries  in  Europe  would  not  charge 
their  manufacturers  rent  for  the  use  of  machinery, 
and  therefore  the  manufacturers  of  Europe  would 
have  the  advantage  and  would  supply  the  people  of 
the  United  States  with  goods,  to  the  exclusion  of 
our  home  manufactured  goods."  My  friend,  that 
matter  can  be  regulated  and  controlled  by  a  high 
tariff.  A  great  many  people  in  this  country  today 
believe  that  a  high  tariff  is  a  good  thing  as  a  pro- 
tection against  cheaply  paid  foreign  labor.  I  ask 
these  people  if  a  tariff  is  a  good  thing  to  protect  us 
against  the  importation  of  goods  manufactured  by 
foreign  workmen,  why  then  is  a  tariff  not  a  good 
thing  to  protect  us  against  the  importation  of  goods 
manufactured  by  foreign  machinery?  The  trouble 
right  now  is  that,  no  matter  how  much  we  protect 
our  workingman  against  the  competition  of  poorly 
paid  foreign  labor,  we  do  not  get  .the  full  benefit,  for 
the  reason  that  our  workingmen  are  not  protected 
against  the  competiiion  of  machinery  in  our  oiun  country. 
We  have  succeeded  in  protecting  the  American  man- 
ufacturer and  his  workmen  from  competition  with 
cheaply  paid  foreign  labor,  but  we  have  not  succeeded  in 
protecting  the  American  workman  from  the  American  man- 
ufacturer who  utilizes  Icibor-saving  machinery.  When  the 
American  manufacturer  sells  his  goods  he  does  not 
have  to  compete  with  the  European  manufacturer, 
and  he  can,  therefore,  sell  his  goods  for  a  high  price, 
but  when  the  American  mauufacturer  produces  his 


THE    AUTOMATIC    SYSTEM  75 

goods,  the  American  laborer,  who  does  the  work  of 
producing  those  goods,  finds  that  he  (the  laborer) 
has  to  compete  with  machinery  in  this  country,  and, 
therefore,  the  tariff  on  foreign-made  goods  does  not 
protect  him  (the  laborer)  as  much  as  it  does  the  man- 
ufacturer, and  he  (the  laborer)  has  to  protect  him- 
self by  forming  labor  unions  and  such  means.    What 
I  propose  is  equivalent  to  a  tariff  on  goods  manufac- 
tured by  machinery  in  this  country,  but    not    a    large 
enough  tariff  to  be  prohibitive,  as  it  is  desirable  to 
manufacture  goods  by  machinery  in  this  country  if 
the  whole  people  will  get  the  benefit.    Of  course,  the 
government  would  not  have  to  actually  engage  in 
the  manufacture  of  machinery  itself,  but  it  could 
have  a  supervision  over  the  manufacture  of  labor- 
saving  machinery,  and  could  require  that  every  such 
machine  in  existence  be  registered  and  numbered, 
and  the  government,  instead  of  charging  a  rental,  in 
such  a  case  could  simply  assess  a  tax  of  the  same 
amount  that  the  rental  would  have  been  in  the  other 
case.    Of  course,  an  allowance  should  be  made  for 
such  time  as  any  machine  might  stand  idle.    When 
we  have  such  a  tax  on  goods  made  by  machinery, 
then  the  individual  workman  with  his  small  work- 
shop will  be  able  to  compete  in  some  measure  with 
the  capitalist  who  possesses  a  large  machinery  plant, 
and  the  workmen  in  the  large  machinery  plant  will 
receive  higher  wages,  while  all  of  our  citizens  will 
participate  more  equally  than  they 'do  now  in  the 
benefits  arising  from  a  protective  tariff.     But  the 
advantages  mentioned  above  do  not  constitute  by 
any  means  the  full  amount  of  good  that  will  be  ac- 


;6  THE    AUTOMATIC    SYSTEM 

complished  by  this  law  with  reference  to  machinery. 
In  order  to  explain  to  you  how  the  whole  people  will 
get  the  benefit  of  machinery  when  the  government 
supervises  and  taxes  the  same,  it  will  be  necessary 
for  me  to  enter  into  that  portion  of  my  plan  of  im- 
provement which  relates  to  pensions  in  the  following 
chapter. 


CHAPTER  VII. 

A  DESCRIPTION  AND  PARTIAL  DISCUSSION  OF  THE 
PROPOSED  LAW  RELATING  TO  PENSIONS. 

You  will  have  noticed  that  by  means  of  the 
various  measures  advocated  in  this  book,  the  govern- 
ment would  receive  quite  a  large  and  excessive  reve- 
nue in  addition  to  the  revenue  it  receives  at  present : 
First,  the  impost  duties  collected  by  the  custom 
house  department  would  be  higher;  second,  there 
would  be  a  slight  percentage  of  profit  over  and  above 
operating  expenses  from  the  various  railroads  and 
other  industries  controlled  by  the  government; 
third,  there  would  be  a  revenue  from  the  money  tax 
amounting  monthly  to  1  per  cent,  of  all  money  in  cir- 
culation; and,  fourth,  the  government  would  receive 
a  large  rental  tax  from  individuals,  firms  and  corpor- 
ations using  labor-saving  machinery  in  their  busi- 
ness. Now,  the  proper  use  for  the  government  to 
make  of  this  great  amount  of  surplus  revenue  would 
be  to  give  to  every  citizen  of  the  United  States  a  pen- 
sion, whether  such  citizen  be  a  male  or  a  female, 
white  or  black,  adult  or  child.  That  pension  should 
be  the  same  in  amount  for  all.  The  rich  man  would 
receive  the  same  as  the  poor  man.  If  there  should 
be  any  special  reason  why  any  particular  person 
should  receive  a  larger  amount,  that  matter  could  be 
regulated  by  a  separate  special  pension  in  the  same 
manner  that  pensions  are  now  granted,  and  the  gov- 
ernment would  be  just  as  strict  in  the  matter  of 
granting  special  pensions  as  it  now  is,  and  would  not 


78  THE    AUTOMATIC    SYSTEM 

graut  such  special  pensions  for  any  other  reasons 
than  such  i^ensions  are  now  granted  or  may  in  the 
future  be  found  to  be  the  policy  of  the  general  laws 
on  that  subject.  Now,  while  I  contend  that  99  per 
cent,  of  our  citizens  will,  by  the  operation  of  the 
various  laws  I  have  mentioned,  make  much  larger 
profits  than  they  have  heretofore  made,  still  in  all 
likelihood,  that  portion  of  each  man's  income  which 
will  be  covered  by  his  share  of  the  general  pension 
will  amount  to  only  a  small  sum  each  month,  and  it  is 
not  my  contention  that  anyone  is  going  to  be  greatly 
benefited  by  the  mere  matter  of  having  a  small  sum 
of  pension  money  added  to  his  other  income  each 
month.  That  is  not  the  reason  I  suggest  this  pension, 
although  I  will  say  that  if  a  man  were  the  head  of  a 
family  of  eight,  consisting  of  himself,  his  wife  and 
six  children,  even  if  the  pension  amounted  to  only 
$1.50  a  month  for  each  individual,  still  it  would 
aggregate  for  the  family  a  total  of  $12.00  a  month, 
and  might  come  in  very  handy.  The  principal  reason 
for  which  I  suggest  the  pension  is  that  it  would  take 
a  vast  amount  of  money  once  each  month  and  put  it 
right  down  at  the  bottom  of  the  channels  of  trade  and 
allow  it  to  percolate  up  in  its  natural  course  through 
the  hands  of  that  great  mass  of  small  trades  people, 
through  the  hands  of  the  middlemen,  and  right  on  up 
to  the  hands  of  the  wholesale  ] merchants  and  manu- 
facturers. In  other  words,  this  pension  is  a  neces- 
sary part  of  the  great  automatic  system  which  this 
book  advocates.  This  pension  would  also  have  a 
very  beneficial  effect  in  stopping  crime,  because  the 
government  would  have  the  name  and  address  of 
every  citizen,  and  any  man  who  was  a  criminal  and 


THE    AUTOMATIC    SYSTEM  79 

fugitive  from  justice  would  either  be  captured  when 
he  drew  his  pension  or  he  would  have  to  forfeit  his 
pension.  Men  who  were  sent  to  prison  should  have 
their  pensions  stopped  during  their  terms  of  impris- 
onment. At  that  time  the  knowledge  of  the  govern- 
ment as  to  the  personnel  of  its  citizens  would  be  so 
accurate  that  it  would  be  found  advantageous  to 
have  the  national  government  supervise  the  voting 
of  the  people  at  all  elections,  and  there  would  then 
be  just  as  few  instances  of  false  votes  being  put  in 
as  there  are  now  of  wrong  persons  drawing  pensions, 
and  cases  of  false  voting  would  be  as  surely  and 
strictly  punished  as  pension  frauds  now  are. 

This  pension  would  be  proper  also  for  the  rea- 
son that  there  would  be  so  many  different  sources 
of  taxation  that  it  would  not  be  right  for  the  govern- 
ment to  retain  and  squander  its  immense  revenue  by 
having  an  expensive  administration  of  its  affairs. 
The  excess  taxes  should  be  returned  to  the  people  in 
the  shape  of  an  equal  pension.  The  object  of  the  tax 
is  not  to  give  the  government  a  revenue,  but  to  pre- 
vent money  from  centralizing  and  to  keep  any  one 
man  from  controlling  a  large  amount  of  labor,  as 
represented  by  labor-saving  machinery,  and  making 
human  labor  compete  with  it,  and  that,  too,  without 
giving  humanity  in  general  its  proper  proportion  of 
the  profits,  and  the  object  of  the  tax  (on  money)  is 
also  to  prevent  the  factories  from  shutting  down 
simply  because  at  any  time  there  happens  to  be 
enough  of  the  output  of  those  factories  in  existence 
to  satisfy  the  current  needs  of  the  consumers  of  that 
output.  If  we  can  so  arrange  matters  that  that  out- 
put will  be  a  valuable  form  in  which  to  hoard  wealth. 


80  THE    AUTOMATIC    SY8TBM 

then  the  factories  will  continue  to  run,  and  the 
laborer  keep  his  job,  even  after  enough  has  been  pro- 
duced to  satisfy  the  current  demand  of  the  people  for 
purposes  of  consumption.  Money  under  our  present 
system  always  has  a  tendency  to  centralize  in  the 
hands  of  a  few,  and  the  only  remedy  for  this  evil 
tendency  is  to  tax  it  (which  will  keep  people  from 
hoarding  large  amounts  of  it)  and  then  give  the  peo- 
ple back  their  tax  (and  at  the  same  time  keep  up  a 
continual  process  of  equalization)  by  means  of  a 
pension  to  every  man,  woman  and  child.  There 
would  be  nothing  wrong  with  this  pension,  because 
every  person  would  get  it.  It  would  be  fair  for  all. 
Under  our  present  system  goods  made  by  machinery 
are  cheap  in  price,  but  men  are  thrown  out  of  work 
and  can  not  buy  them  even  at  the  cheap  price.  A 
man  can  not  be  a  consumer  unless  he  has  money,  and 
that  fact  not  only  injures  the  man  himself,  but  it 
injures  all  merchants  and  manufacturers  in  business, 
and  if  we  can  have  a  system  by  which  even  a  man  out 
of  work  would  receive  for  himself  and  his  family  the 
means  of  becoming  a  consumer  to  at  least  a  small  ex- 
tent, all  the  merchants  and  manufacturers  will  be 
benefited  where  they  were  before  injured.  Men  in 
their  individual  capacity  do  not  seem  to  have  enough 
faith  to  make  them  loosen  up  so  as  to  cause  things 
to  run  smoothly,  and  hence  it  is  that  it  is  necessary 
for  the  government  to  take  upon  itself  this  burden. 
If  we  are  to  continue  under  our  present  competi- 
tive commercial  system,  under  which  each  citizen 
enjoys  so  much  of  the  personal  liberty  so  dear  to  his 
heart,  to  go  where  he  pleases  and  engage  in  what 
occupation  he  desires,  then  this  pension  will  become 


THE    AUTOMATIC    SYSTEM  81 

an  absolute  necessity  in  connection  with  the  machin- 
ery problem,  for  the  time  is  surely  coming,  though 
perhaps  far  distant,  when  the  machinery  used  in 
mining,  farming  and  manufacturing  will  be  so  per- 
fected that  it  will  require  only  about  10  per  cent,  of 
the  laborers  now  engaged  in  those  different  lines. 
Of  course,  at  that  time  many  of  the  laborers  consti- 
tuting the  remaining  90  per  cent,  will  be  engaged  in 
nobler  pursuits  and  in  the  production  of  works  of 
art,  etc.,  but  they  will  be  affected  by  the  fact  that 
machinery  will  be  doing  so  much  of  the  work,  thus 
tending  to  keep  them  from  getting  employment,  and 
they  should  participate  in  the  benefits  of  machinery 
at  that  time  by  receiving  this  pension,  which  at  that 
time  will  amount  to  quite  a  large  amount  for  each 
individual.  In  other  words,  not  one  dollar  of  the  tax 
on  labor  as  represented  by  machinery  should  be  so 
used  as  to  be  an  expense  to  the  people,  but  every  dol- 
lar of  it  should  be  returned  to  them  in  the  shape  of 
the  pension.  It  is  a  necessary  part  of  the  automatic 
system.  If  you  have  gained  the  impression  that  it 
is  an  expensive  system,  you  are  mistaken.  The  new 
system  costs  the  people  absolutely  nothing  over  and 
above  what  they  now  pay  as  taxes.  Every  dollar 
collected  as  taxes  over  and  above  that  now  collected 
under  our  present  system  is  returned  to  the  people. 
I  once  stood  by  while  two  gentlemen,  one  of 
them  a  United  States  senator,  were  discussing  mat- 
ters of  political  economy.  In  the  course  of  the  con- 
versation the  senator  said  to  the  other  gentleman: 
' '  Oh,  you  fellows  are  a  lot  of  cranks.  Some  day  we 
will  run  this  government  to  suit  you  and  we  will  give 
every  man  a  pension ! ' '    He  said  this  in  a  very  scorn- 


82  THE    AUTOMATIC    SYSTEM 

ful  manner,  as  being  about  the  most  ridiculous  thing 
imaginable,  but  I  say  to  you  that  in  the  simplicity  of 
his  mind  he  spoke  better  than  he  knew,  and  that  he 
may  yet  live  to  learn  that  the  wisest  part  of  his  dis- 
course was  that  which  he  exploited  as  most  ridic- 
ulous. 


CHAPTER  VIII. 

CONTAINING   A    GENERAL    DISCUSSION    OF    THE    THREE 
PROPOSED  LAWS  AND  SHOWING  THEIR  APPLICA- 
TION TO  THE  SOCIAL  PROBLEM. 

Under  date  of  July  2,  1900,  the  United  States 
Treasury  Department  issued  its  Circular  No.  113, 
containing  "Information  Respecting  United  States 
Bonds,  Paper  Currency,  Coin,  Production  of  Pre- 
cious Metals,  etc."  On  page  62  of  that  circular  the 
amount  of  money  in  circulation  in  the  United  States 
for  the  year  1900  is  given  at  $2,062,425,496.00.  The 
population  of  the  country  is  placed  at  77,816,000,  and 
using  these  figures  as  a  basis,  the  circular  shows  that 
the  per  capita  of  money  in  circulation  for  the  year 
1900  amounts  to  $26.50  for  each  individual. 

It  must  be  apparent  to  every  one  that  when  the 
government  controls  and  operates  the  great  indus- 
tries contemplated  by  this  book,  it  will  be  perfectly 
able  to  redeem  its  promises  to  pay  in  labor  and  ser- 
vice to  an  amount  much  greater  than  the  present 
sum  of  money  in  circulation,  and  especially  is  this 
true  when  we  consider  that  it  will  make  a  slight 
profit  on  each  promise  to  pay  that  it  redeems.  It  is 
very  apparent,  also,  that  should  the  government 
adopt  this  kind  of  money,  in  all  probability,  the 
amount  outstanding  or  in  circulation  would  never 
reach  a  sum  as  large  in  proportion  to  the  population 
at  any  time  in  the  future  as  the  amount  now  in  cir- 
culation of  our  present  kind  of  money  bears  to  the 
present  population.    I  say  this  because  it  is  a  self 


84  THE    AUTOMATIC    SYSTEM 

evident  proposition  that  money  which  wonld  be 
taxed  automatically  would  not  be  hoarded  by  the 
people,  but  that  the  man  who  had  his  business  in  a 
healthy  state  would  keep  on  hand  only  such  amount 
of  money  as  would  be  necessary  to  run  his  business, 
and  further,  that  commerce  would  not  require  as 
much  of  a  kind  of  money  which  would  circulate  prop- 
erly as  it  does  now  of  a  kind  of  money  which  by  its 
very  nature  does  not  circulate  properly,  but  is  clung 
to  by  everyone,  and  valued  not  alone  on  account  of 
its  present  purchasing  ability,  but  because  people 
want  to  hoard  it.  This  money  would  not  be  dishon- 
ored or  refused  by  the  public.  Indeed,  if  an  insuffi- 
cient amount  were  in  circulation,  the  great  produc- 
ing and  consuming  class  of  the  United  States  would 
make  a  vigorous  demand  that  the  matter  be  cor- 
rected. In  fact,  at  such  a  time  the  great  demand 
for  it  would  cause  the  matter  to  adjust  itself.  Thus : 
The  money  would  consist  of  promises  to  pay  by  the 
government,  and,  of  course,  the  government  would 
be  constantly  and  continuously  engaged  in  the  work 
of  redeeming  those  promises  as  they  were  presented 
at  the  various  offices  where  its  railroad,  street  car, 
gas,  electric  light,  water  works,  coal  and  other  lines 
of  business  were  conducted,  and  of  necessity  (after 
the  money  had  once  been  properly  put  into  circula- 
tion) there  would  always  be  a  certain  large  amount 
of  it  outstanding  which  would  be  circulating  from 
hand  to  hand  amongst  the  people,  who,  of  course,  re- 
quire money  for  purposes  of  commerce.  The  infu- 
sion of  a  large  amount  of  circulating  medium  into  the 
general  commerce  of  the  country  would  be  assured 
by  the  fact  that  the  government  would  continually 


THE    AUTOMATIC    SYSTEM  85 

be  paying  out  these  promises  to  pay  to  its  large  army 
of  employes  at  work  in  the  various  industries  con- 
trolled by  the  government.  These  employes  would 
not  present  the  money  directly  to  the  government  for 
redemption  in  the  particular  branch  which  employed 
them,  but  would  put  it  into  circulation  by  spending 
it  with  grocers,  butchers,  clothing  merchants,  land- 
lords and  the  like,  who  would  have  it  redeemed  in 
any  of  the  many  lines  of  industry  controlled  by  the 
government,  or  would  circulate  it  among  themselves, 
knowing  full  well  that  it  had  behind  it  all  the  valu- 
able commodities  and  service  of  those  great  indus- 
tries and  not  simply  a  limited  amount  of  one  com- 
modity, to-wit:  gold.  The  government  itself  would 
be  the  largest  business  concern  in  the  country,  and 
would  always  be  in  a  position  to  feel  the  financial 
pulse  of  the  country.  The  growth  of  commerce  under 
this  system  would  be  large,  and,  of  course,  the  popu- 
lation would  increase  as  it  has  done  in  the  past. 
When  the  government,  through  its  own  business' 
connection,  discovered  that  there  was  inconvenience 
experienced  in  procuring  enough  money  with  which 
to  do  the  business  of  the  country,  it  would  be  its  duty 
to  cause  a  large  quantity  of  coal  to  be  mined,  or  to 
have  betterments  made  on  some  of  its  property,  in 
payment  of  which  it  should  issue  an  additional 
amount  of  money  commensurate  with  the  needs  of 
commerce.  Now,  one  of  the  great  distinguishing 
points  between  this  money  and  the  money  we  have 
at  present  would  be  that  the  quantity  of  the  new 
money  in  existence  at  any  time  would  not  be  the 
thing  which  regulated  its  value,  whereas  at  present 
the  value  of  our  money,  like  the  value  of  any  com- 


86  THE   AUTOMATIC    SYSTEM 

modity,  depends  to  a  great  extent  on  the  amount  of 
money  in  existence.  The  regulation  of  the  amount 
of  money  in  existence,  under  the  plan  which  I  sug- 
gest, would  not  be  for  the  purpose  of  regulating  the 
value  of  the  money,  hut  simply  for  the  purpose  of 
having  the  quantity  of  money  in  existence  adapt 
itself  to  the  convenience  of  the  people  in  view  of 
their  commercial  needs;  but  the  value  of  the  money 
would  not  be  changed  by  the  quantity.  When  a 
written  instrument  (issued  by  a  solvent  concern)  is 
by  its  terms  a  representative  of  value,  its  value  con- 
sists in  the  fact  simply  that  the  thing  of  which  it  is 
a  representative  is  a  thing  of  value,  and  its  value  is 
not  changed  by  any  change  in  the  quantity  of  the 
written  instruments  outstanding,  as  long  as  the  con- 
cern which  issues  it  remains  solvent,  but  any  change 
in  order  to  affect  its  value  would  have  to  be  some 
change  which  affected  the  value  of  the  thing  repre- 
sented. Thus  you  see  that  in  this  respect  the  same 
rule  would  apply  to  this  money  as  applies  to  a  gov- 
ernment bond.  The  value  of  a  government  bond 
does  not  consist  in  the  intrinsic  value  of  the  paper 
and  ink  of  which  it  is  composed,  and  therefore  the 
value  of  a  government  bond  today  (issued  by  a 
solvent  government)  does  not  depend  on  the  supply 
or  number  of  bonds  outstanding  issued  by  that  gov- 
ernment, but  depends  on  the  amount  of  principal  and 
interest  which  that  solvent  govermnent  is  to  pay  un- 
der the  terms  of  the  bond.  Of  course,  if  too  great  a 
number  of  bonds  is  outstanding,  that  fact  will  alfect 
the  solvency  of  the  government,  and  then  a  further 
element  has  necessarily  to  be  considered  in  arriving 
at  the  value,  but  that  forms  a  question  of  itself  else- 


THE    AUTOMATIC    SYSTEM  87 

where  discussed  in  this  work  so  far  as  it  applies  to 
our  government.  At  present  I  am  arguing  the  case 
from  the  standpoint  of  a  government  of  perfect 
solvency.  Of  course,  it  is  also  true  that  the  value  of 
such  bonds  could  be  sUgldhj  changed  by  their  becom- 
ing the  subject  of  manipulation  or  jobbery  in  the 
market.  But  the  idea  which  I  have  been  trying  to 
convey  is  this:  Suppose  a  government  at  one  time 
has  outstanding  $1,000,000  of  bonds,  and  that  it 
issues  an  additional  $49,000,000  of  such  bonds,  mak- 
ing the  total  amount  $50,000,000,  the  said  govern- 
ment being  perfectly  solvent  for  either  amount:  The 
law  of  supply  and  demand  does  not  apply  to  such  a 
case,  as  bonds  are  simply  representatives  of  value,  and 
therefore  the  fact  that  the  outstanding  amount  is 
fifty  times  as  great  as  before  does  not  necessarily 
cause  any  change  in  the  real  value  of  the  bonds  what- 
ever; but  if,  from  some  source,  the  amount  in  exist- 
ence of  the  thing  in  which  those  bonds  are  payable 
(gold)  could  be  multiplied  fifty  times,  the  law  of 
supply  and  demand  would  have  full  sway,  and  the 
real  value  of  those  bonds  (while  they  would  still  call 
for  the  same  amount  of  money  or  gold)  would  never- 
theless be  much  depreciated  because  of  the  fact  that 
gold  had  become  so  plentiful  as  to  lose  greatly  in  pur- 
chasing power.  The  value  of  the  money  which  I 
advocate  would  always  depend  ON  HOW  MUCH 
SERVICE  THE  GOVERNMENT  WOULD  PER- 
FORM FOR  A  DOLLAR.  Please  do  not  lose  sight 
of  the  fact  that  this  money  is  based  on  LABOR,  and 
that  God  Himself  regulates  the  quantity  and  that  He 
has  provided  manual  labor  in  exact  proportion  to 
the  population.     The  only  way  this  money  would 


88  THE    AUTOMATIC    SYSTEM 

appear  to  change  in  value  would  be  for  labor  itself  to 
become  more  productive — that  is,  the  labor  of  one 
man  capable  of  producing  more  than  it  did  before. 
At  that  time  all  things  produced  by  labor  would 
properly  sustain  a  less  relative  value  to  labor,  or  to 
money  based  on  labor,  and  at  that  time  the  govern- 
ment would  give  more  service  for  a  dollar  and  the 
people  would  get  the  benefit.  Any  change  in  the  pur- 
chasing power  of  money  that  was  caused  by  that 
fact,  however,  would  not  be  a  change  that  worked 
injustice  to  any  man,  and  would  not  be  a  change  in 
the  relationship  which  the  value  of  money  would 
sustain  to  a  stationary  standard  of  value.  The  real  value 
of  an  article  depends  on  what  sacrifice  or  labor  a 
human  being  has  to  undergo  to  get  it.  This  rule 
does  not  conflict  with  the  rule  which  says  the  in- 
trinsic value  of  an  article  depends  on  the  supply  and 
demand,  for  you  will  see  that  when  the  supply  is 
great  and  the  demand  is  small,  a  man  ordinarily  does 
not  have  to  undergo  much  sacrifice  or  labor  to  get 
the  article.  Now,  to  make  the  application:  If  a 
manufacturer  were  one  year  to  borrow  from  another 
manufacturer  10,000  pairs  of  shoes  which  it  had  re- 
quired an  amount  of  labor  equal  to  the  labor  of  one 
man  for  4,000  days  to  produce,  and  if  the  first  manu- 
facturer were  to  pay  the  second  manufacturer  a  sim- 
ilar 10,000  pairs  of  shoes  back,  after  a  lapse  of  time 
of  two  years,  and  if,  in  the  interval,  improved  meth- 
ods in  shoe  manufacture  had  rendered  it  possible 
for  those  10,000  pairs  of  shoes  to  be  produced  by  an 
amount  of  labor  equal  to  the  labor  of  one  man  for 
only  2,000  days,  which  change  had  resulted  in  a  less- 
ening of  the  value  of  shoes,  it  will  be  seen  that  while 


THE    AUTOMATIC    SYSTEM  89 

the  last  manufacturer  had  received  back  the  same 
number  of  shoes  of  the  same  kind,  still  he  had  lost  by 
the  operation,  because  of  the  change  in  value  during 
the  two  years  that  had  elapsed.  Now,  in  the  case  of 
the  money  I  propose,  its  purchasing  value  will  only 
increase  in  exact  i^roportion  as  the  producing  ability 
of  labor,  on  which  it  is  based,  increases,  and  men 
borrowing  and  paying  in  this  money,  although  the 
payment  may  be  made  many  years  after  the  loan  was 
procured,  will  find  that  the  money  itself,  in  its  pur- 
chasing value,  has  taken  into  account  the  change  in 
the  amount  of  labor  or  sacrifice  necessary  to  produce 
all  those  different  kinds  of  articles  for  which  money 
is  exchanged.  Professor  Laughlin,  in  his  "Elements 
of  Political  Economy,"  heretofore  mentioned,  and 
in  the  same  paragraph  from  which  we  have  before 
quoted,  states  as  follows:  "Hence  the  value  of 
money  (gold  or  silver)  does  not  remain  the  same  for 
any  length  of  time;  and  the  precious  metals,  while 
they  are  very  satisfactory  for  exchanges  which  do 
not  take  very  long  to  complete,  can  not  serve  as  a 
proper  measure  of  value  during  a  long  term  of  years. 
*  *  *  Nor  is  there  another  article  any  better,  or 
even  so  well,  adapted  for  this  purpose."  I  agree 
with  him  when  he  says  that  gold  and  silver  are  unfit 
as  a  measurement  of  value  to  be  used  in  long  time 
contracts,  but  I  do  not  agree  with  him  when  he  says 
nothing  better  can  be  used.  I  will  say  right  here 
that  under  our  present  monetary  and  commercial  sys- 
tem there  is  absolutely  no  connection  between  the 
means  by  which  money  is  produced  and  the  demands 
of  the  commercial  world  for  money.  In  his  next  par- 
agraph (74),  Mr.  Laughlin  goes  hopelessly  astray 


90  THE    AUTOMATIC    SYSTEM 

and  endorses  what  is  known  as  the  ''multiple 
standard."  He  contends  that  in  order  to  pay  back 
the  exact  amount  in  value  that  was  borrowed,  when 
the  i^ayment  is  made  a  long  number  of  years  after 
the  loan,  the  borrower  should  only  pay  back  such 
amount  of  money  as  would  be  necessary  to  purchase 
in  a  given  market  a  quantity  of  various  kinds  of 
goods  exactly  equal  to  the  quantity  of  such  goods 
that  could  have  been  purchased  for  the  amount  of 
money  loaned,  at  the  time  of  the  loan.  One  can  see 
how  this  would  work  out:  If  you  lend  me  $100.00 
in  the  year  1900,  for  which  I  can  purchase  a  certain 
amount  of  twenty  different  kinds  of  standard  arti- 
cles, and  if,  in  the  year  1920,  I  desire  to  pay  you 
back,  and  if  a  list  of  exactly  similar  articles  can  be 
bought  for  $50.00  at  that  time,  it  is  his  contention 
that  under  a  just  standard  of  value,  I  should  only 
pay  you  $50.00  back.  (Of  course,  the  amount  of  in- 
terest that  may  have  been  paid  every  year  is  not  to 
be  considered  in  this  proposition.  We  are  speaking 
now  only  of  a  repayment  of  the  principal.)  This  is 
absurd.  Professor  Laughlin  forgets  that  in  a  pre- 
vious portion  of  his  work,  '' Elements  of  Political 
Economy,"  (paragraph  58),  he  said:  "To  have 
value,  a  thing  must  be  such  that  we  are  obliged  to 
undergo  some  sacrifice  in  order  to  get  it.  *  *  * 
The  sacrifice  undergone  is  greater  in  getting  a  pearl 
than  in  getting  a  piece  of  coal  of  much  larger  size; 
in  fact,  the  number  of  days'  labor  spent  in  finding 
a  large  pearl  would,  if  spent  in  coal  mining,  produce 
several  tons  of  coal.  Then,  if  the  pearl  costs  more 
labor  to  get  it  than  a  piece  of  coal,  it  is  evident  that 
more  sacrifice  is  required  in  the  case  of  the  pearl  than 


THE    AUTOMATIC    SYSTEM  91 

in  the  case  of  the  coal. ' '  If  Professor  Laughlin  had 
read  his  paragraph  58  before  he  wrote  his  paragraph 
74,  he  never  wonld  have  written  the  latter  paragraph. 
Instead,  he  wonld  have  argued  as  follows,  to  use  his 
own  language  in  paragraph  58,  substituting  in  place 
of  the  pearl  and  the  coal,  the  matter  dealt  with  in 
paragraph  74 :  "  The  sacrifice  undergone  in  producing 
a  cei'tain  amount  of  certain  articles  now  may  be  greater 
than  it  ivill  be  twenty  years  from  now  to  produce  a  larger 
quantity  of  those  articles;  in  fact,  the  number  of  days' 
labor  spent  in  producing  those  articles  now  would,  if 
spent  m  production  twenty  years  from  now,  produce 
a  much  larger  quantity  of  those  articles.  Then,  if  the 
articles  as  now  produced  cost  more  labor  to  produce  them 
than  the  same  amount  of  articles  produced  twenty  years  from 
now,  it  is  evident  that  more  sacrifice  is  required  in 
the  case  of  producing  that  cei-tain  quantity  of  articles  now 
than  in  producing  the  same  quantity  of  the  same  article 
tiventy  years  from  now.''^  In  other  words,  the  finely- 
spun  theory  of  Multiple  Standard,"  when  subjected 
to  the  light  of  the  truth  contained  in  Professor 
Laughlin 's  rule  of  value  in  paragraph  58,  develops 
the  fact  that  under  said  ''Multiple  Standard"  there 
is  no  assurance  at  all  that  a  man  would  be  paying 
back  the  same  in  value.  The  ''Multiple  Standard" 
goes  on  the  theory  that  the  sacrifice  or  labor  neces- 
sary to  produce  a  list  of  articles  is  the  same  at  pe- 
riods of  time  far  separated  from  one  another,  which 
is  a  mistaken  idea,  and  should  not  be  taught  to  stu- 
dents of  political  economy. 

The  "Multiple  Standard,"  partly  comprehends 
the  relationship  in  value  of  commodities  to  each 
other,  hut  it  docs  not  comprehend  the  relationship  of  the 


92  THE    AUTOMATIC    SYSTEM 

value  of  commodities  to  a  stationary  standard  of  value. 
It  strikes  a  blind  average,  and  uses  that  as  a  stand- 
ard, notwithstanding  that  that  average  must  surely 
jump  up  and  down  in  answer  to  every  change  in 
value  of  commodities,  and  it  ignores  the  fact  that  a 
scientific  stationary  standard  of  value  may  be  arrived 
at  by  simply  considering  the  amount  of  labor  or  sac- 
rifice which  a  human  being  will  undergo  to  produce 
or  obtain  those  commodities,  in  relation  to  which  sta- 
tionary standard  of  value  it  is  very  j)roper  that  the 
value  of  all  commodities  should  change  as  the  result 
of  phenomena  affecting  themselves  and  one  another. 
I  have  called  your  attention  to  the  matter  of  the 
amount  of  money  in  circulation  because  I  am  con- 
vinced that  those  men  who  are  capable  of  controlling 
the  money  market  today  (either  gold  or  silver,  or 
both)  will  try  to  make  you  believe  that  this  money 
which  I  am  advocating  is  no  better  than  fiat  money, 
and  that  if  the  government  should  adopt  it,  it  would 
ruin  the  credit  of  the  government.  These  men  sim- 
ply lie  to  you!  They  know  that  the  government  is 
solvent  and  strong,  and  they  know  in  their  hearts 
that  if  the  government  owed  in  interest-bearing 
bonds  ten  times  the  amount  of  the  present  money  in 
circulation  in  this  country,  they  would  still  be  willing 
to  buy  those  bonds  and  pay  a  premium  for  them. 
Then  whj^  should  anybody  question  the  solvency  of 
the  government  if  it  were  to  issue  some  money  re- 
deemable in  service,  on  which  it  made  a  profit  every 
time  it  redeemed  any,  and  which,  instead  of  bearing 
interest  like  bonds,  would  itself  be  a  source  of  reve- 
nue to  the  government,  because  it  would  be  auto- 
matically taxed  f  These  men  will  not  fight  this  money 


THE    AUTOMATIC    SYSTEM  93 

because  they  have  a  tender  solicitude  for  the  credit 
of  the  government,  nor  because  they  are  afraid 
money  based  on  the  credit  of  the  government  (with 
a  provision  for  actual  redemption  in  value)  would 
not  be  good  money.  What  these  men  are  afraid  of 
is  that  their  corner  on  the  money  market  will  be  dis- 
turbed, and  that's  all  they  are  afraid  of.* 

The  laborer  is  worthy  of  his  hire,  and  this  ap- 
plies all  the  way  up  through  the  lines  of  industry, 
from  the  workman  in  the  shop  to  the  manufacturer 
in  his  office,  but  there  is  one  man  who  does  not  earn 
what  he  receives.  That  is  the  man  who  lives  by  col- 
lecting interest,  and  he  is  the  man  who  will  oppose 
the  plan  advocated  herein.  Those  of  you  who  are 
manufacturers,  merchants  and  middlemen  will  not 
oppose  it  when  once  you  understand  it.  You  should 
ask  no  more  of  money  than  that  it  be  a  representa- 
tive of  value  and  a  medium  of  exchange.  You  are 
men  whose  prosperity  peculiarly  depends  upon  the 
rapidity  with  which  commodities  are  exchanged  in 
the  channels  of  trade,  and  upon  the  ability  of  the 
great  mass  of  the  people  to  act  as  consumers  of  the 
wares  in  which  you  deal.  You,  of  all  classes  of  people, 
should  demand  thai  ive  have  a  money  incapable  of  being 
hoarded.  Then  those  amongst  you  who  are  progres- 
sive and  enterprising,  and  who  desire  to  go  ahead 

*The  above  contention  of  the  v/riter,  made  seven  j-ears 
ago,  has  been  borne  out  by  the  attitude  assumed  by  recent  con- 
ventions of  bankers,  at  v.hich  was  most  favorably  discussed  the 
proposition  that  the  national  banks  should  be  permitted  to  issue 
money,  based  simply  ou  their  own  credit  and  limited  only  by 
their  own  rules  and  ideas.  Surely  the  people  of  the  United 
States  will  never  be  so  weak  as  to  surrender  this  important 
function  of  government  to  those  having  selfish  interests  to 
serve,  nor  so  weak  as  to  admit  that  the  government  would  be 
less  responsible  than  the  bankers. 


94  THE    AUTOMATIC    SYSTEM 

and  reinvest  your  money  in  your  business,  can  do  so 
without  fear  of  becoming  a  sacrifice  to  the  rest  of 
society,  because  all  of  your  competitors  will  also  be 
forced  to  put  their  money  back  into  circulation  and 
make  things  lively.  Under  the  present  system  you 
gentlemen  cut  a  very  ridiculous  figure,  and  resemble 
nothing  else  so  much  as  you  do  a  lot  of  fishermen, 
sitting  on  their  lines  and  hooks  and  hoarding  them 
instead  of  catching  fish  with  them.  You  people  must 
not  hoard  money  and  try  to  get  rich  in  that  way. 
There  is  only  a  per  capita  of  money  in  this  country  of 
about  $26.50.  That  is  not  enough  to  permit  many 
people  to  become  very  rich ;  and  even  if  the  percapita 
were  very  much  larger,  thus  enabling  many  joeople 
to  acquire  large  sums  of  money,  they  would  find  out 
that  they  had  not  succeeded  in  getting  rich,  because 
if  all  of  us  had  large  quantities  of  money,  the  money 
would  be  practically  worthless.  The  only  rational 
way  in  which  any  large  proportion  of  humanity  can 
become  rich  is  in  material  w^ealth — not  in  money. 
What  you  need  is  not  more  money,  but  a  proper  sys- 
tem. To  make  the  comparison  which  I  have  above 
mentioned  between  yourselves  and  the  fishermen 
exactly  fit  the  case,  it  would  be  necessary  to  put  the 
fishermen  in  a  condition  where  the  amount  of  lines 
and  hooks  which  they  could  get  would  be  limited, 
just  as  the  supply  of  money  is  (and  should  be)  lim- 
ited with  the  business  world  of  today.  Then  I  think 
the  dullest  of  you  gentlemen  would  be  able  to  see  how 
ridiculous  the  fishermen  would  look  if  they  tried  to 
get  rich  by  hoarding  fish  lines  instead  of  catching 
fish  with  them.  You  would  say:  "There  is  only  a 
cei'taiu  number  of  fish  lines  in  existence;  therefore 


THE    AUTOMATIC    SYSTEM  95 

the  combined  wealth  of  those  fishermen  will  never 
be  any  more  than  it  is  now.  Why  don't  they  make 
a  rational  use  of  their  lines  and  catch  fish  with 
them?"  I  say  to  you,  gentlemen,  that  you  are  standing 
upon  the  banks  of  an  ocean  of  labor,  and  that  if  you  are 
willing  to  cast  and  re-cast  your  monetary  lines  into  that 
ocean,  it  will  throw  you  up  wealth  as  continuously  and 
plentifully  as  ever  the  salt  waters  of  the  sea  were  able  to 
deliver  up  fish  to  fishermen,  but  in  order  to  make  this 
possible  you  must  take  your  wealth  in  fish — not  in  fish 
lines.  All  the  lines  that  any  fisherman  needs  is 
enough  to  do  his  fishing.  The  picture  of  the  fisher- 
men which  I  have  presented  to  you  looks  absurd,  be- 
cause we  all  know  that  there  is  no  reason  why  fish- 
ermen can  not  go  on  and  fish,  but  with  you  gentle- 
men the  case  is  different.  It  is  a  fact,  under  our 
present  system,  that  those  of  you  who  are  our  best 
citizens  and  realize  that  the  laboring  classes,  by 
whose  labor  you  live,  can  not  themselves  live  unless 
you  reinvest  your  money,  are  not  able  to  safely  carry 
out  your  public-spirited  impulses  without  becoming 
sacrifices  to  the  greed  of  your  brothers  in  trade  ivho 
refuse,  from  selfish  motives,  to  let  go  of  that  convenient  form 
of  wealth  known  as  money.  Therefore,  you  benefit  their 
business  by  putting  your  money  into  circulation,  but 
ruin  yourself,  because  you  receive  no  compensatory 
benefit,  as  you  would  receive  if  they  would  also  re- 
invest their  money.  What  I  recommend  is  a  plan  of 
government  patterned  after  the  work  of  God  Himself. 
See  how  He  has  constructed  the  human  system  with 
its  heart  and  its  blood  vessels.  When  the  heart 
pumps  the  blood  into  the  system,  the  system  just  as 
surely  allows  it  to  pass  back  into  the  heart.    Here 


96  THE   AUTOMATIC    SYSTEM 

there  is  that  perfect  co-operation  between  the  heart 
and  the  system  as  to  blood  that  there  should  be  be- 
tween the  employer  and  the  employed  today  as  to 
money.  The  heart  does  not  try  to  hoard  up  the  blood 
by  taking  a  percentage  of  its  quantity  each  time  it 
passes  into  the  heart.  If  it  did,  then  indeed  would 
all  parts  of  the  system  set  up  a  free  silver  agitation"' 
and  say,  "We  have  not  enough  circulating  medium," 
and  the  heart  would  answer  back,  "Oh,  I  don't  see 
how  that  is.  I  have  plenty  of  circulating  medium. 
What  we  want  is  not  more  circulating  medium,  but 
we  do  want  confidence  and  good  credit  established, 
so  that  when  I  send  blood  down  into  the  rest  of  the 
system  I  will  know  that  I  will  be  able  to  get  it  back 
again,  with  some  more  besides  as  interest  on  it." 
No,  God  did  not  make  the  human  system  that  way. 
If  he  had,  human  kind  would  have  stopped  about 
where  it  started,  for  the  first  man  who  was  produced 
would  have  only  lasted  long  enough  for  his  heart  to 
beat  about  ten  times.  You  people  need  never  expect 
to  have  confidence  restored  in  this  way,  because  it  is 
absolutely  impossible  for  you  employers  to  keep  on 
hoarding  your  profit  in  money,  until  you  get  about 
all  the  money  there  is  in  circulation  in  your  hands, 
and  then  still  have  confidence  of  getting  more.  There 
isnH  any  more  for  you  to  get.  What  you  want  is  a 
proper  system.  Then  you  will  have  confidence.  You 
must  look  to  the  government  for  that  proper  system. 
I  have  heard  a  great  many  so-called  statesmen, 
who  were  sent  by  the  people  to  represent  them  in 

*"Free  silver  agitation" — this  phrase  has  reference  to  the 
agitation  at  recent  presidential  elections  In  favor  of  increasing 
the  circulating  medium  by  admitting  silver  ore  to  free  coinage, 
the  same  as  gold,  in  the  United  States  mints. 


THE   AUTOMATIC    SYSTEM  97 

law-making  bodies,  complain  that  people  made  them 
sick  and  tired  by  expecting  them  to  legislate  pros- 
perity. They  say:  "Why,  prosperity  comes  from 
God.  You  can  not  legislate  prosperity. ' '  My  friends, 
God  has  given  us  all  we  need  to  make  us  prosperous. 
Don't  let  these  men  fool  you.  Apply  the  same  rule 
to  them  that  you  would  apply  if  you  wanted  to  hire 
a  man  to  shake  a  carpet.  You  would  not  hire  a  man 
to  shake  a  carpet  who  said  it  couldn't  be  done,  would 
you?  Then  why  do  you  send  men  to  Congress  who 
say  they  can  not  legislate  prosperity?  Why  don't 
you  pick  out  men  who  can  do  the  work  ? 

But  to  return  to  the  human  heart  and  the  blood 
vessels  of  the  human  body.  There  we  find  that  con- 
fidence is  complete.  The  heart  knows  that  the  blood 
can  not  get  away  when  it  passes  into  the  system.  It 
knows  that  the  blood  will  come  back,  even  though  it 
comes  back  through  different  channels  than  those 
through  which  it  was  distributed,  as  in  the  plan  pro- 
posed in  this  book.  And  as  for  the  system,  it,  too, 
has  confidence.  It  knows  that  the  blood  can  not  get 
out  at  the  heart  end  of  the  business,  but  that  God  has 
so  fashioned  the  heart  that  it  will  promptly  return 
the  blood.  You  will  notice  also  that  when  God  per- 
mits the  human  body  to  become  prosperous  and  well 
nourished,  it  is  done  mostly  by  means  of  fat.  The 
body  becomes  prosperous  not  merely  in  blood,  but 
by  the  acquisition  of  great  quantities  of  fat.  The 
same  principle  of  perfect  co-operation  would  apply 
to  our  monetary  and  commercial  system  today,  if 
you  gentlemen,  who  represent  in  that  system  what 
the  human  heart  does  in  the  human  body,  would  send 
back   the  money  into   the    channels    of    trade    as 


98  THE    AUTOMATIC    SYSTEM 

promptly  as  the  human  heart  sends  back  the  blood 
into  the  system.  The  trouble  is  that  you  are  using  a 
commodity  for  money  to  which  the  principles  laid 
down  in  this  book  can  not  be  applied. 

The  most  responsible  students  of  the  money 
question  unite  (and  very  properly)  in  saying  that 
money  should  not  be  a  mere  fiat,  but  should  repre- 
sent value.  There  is,  however,  a  distinction  between 
intrinsic  value  itself  and  a  representative  of  value. 
Thus,  neither  a  promissory  note  for  the  payment  of 
a  certain  amount  of  gold,  nor  a  contract  of  delivery 
for  the  delivery  of  a  certain  number  of  bushels  of 
potatoes,  contains  any  intrinsic  value  in  the  paper 
and  ink  of  which  it  is  composed.  Yet,  contracts  of 
such  a  nature,  if  signed  by  a  responsible  person,  who 
will  carry  out  the  terms  of  such  instrument,  are  true 
representatives  of  value,  and  no  man  would  part  with 
title  to  them  unless  he  received  their  full  value.  It 
will  be  conceded,  therefore,  that  if  a  government  is 
solvent  and  responsible,  while  the  simple  printing 
by  it  of  a  declaration  to  the  effect  that  a  piece  of 
paper  is  money  would  not  give  that  paper  any  real 
value,  either  intrinsic  or  representative,  yet,  if  that 
government  will  actually  enter  into  a  written  promise 
to  pay  value,  then  such  written  promise  to  pay,  se- 
cured by  the  property  of  and  signed  by  such  a  sol- 
vent and  responsible  government,  activelj^  engaged 
in  actually  redeeming  such  promises  to  pay,  would  be 
a  true  representative  of  value  and  medium  of  ex- 
change, and  as  such,  would  be  all  that  men  have  a 
right  to  demand  as  money.  Now,  if  we  have  money 
at  all,  we  want  that  money  which  is  best  for  the  peo- 
ple in  general,  and  the  question  then  arises,  in  accept- 


THE    AUTOMATIC    SYSTEM  99 

ing  these  promises  to  pay  of  this  responsible  govern- 
ment, what  do  we  want  the  promises  to  be  payable 
in  I  I  think  I  can  hear  every  money  lender  in  the 
country  saying  *'gold,"  or,  perhaps,  "gold  and  sil- 
ver. ' '  My  friend,  gold  and  silver  are  only  commodi- 
ties, and  are  entitled  to  no  more  consideration  at  the 
hands  of  the  government  than  any  other  commodity. 
A  farmer  might  just  as  well  demand  that  these  prom- 
ises be  made  payable  in  wheat,  and  his  demand  would 
be  fully  as  justifiable  (except  upon  the  score  of  con- 
venience in  handling  and  preserving,  which  is  not  of 
itself  of  sufficient  importance  to  allow  it  to  have  a  de- 
ciding influence  in  the  matter).  As  shown  elsewhere, 
gold,  while  it  never  varies  in  value  when  measured 
in  itself,  nevertheless  does  vary  in  value  in  its  pur- 
chasing ability  of  other  commodities,  said  variation 
being  caused  not  alone  by  changes  affecting  the  value 
of  those  commodities,  but  by  changes  in  the  produc- 
tion or  demand  for  gold  itself,  as  the  value  of  gold 
is  dependent  upon  those  ordinary  laws  which  are  ap- 
plicable to  all  commodities.  If  the  supply  of  gold 
could  be  diminished  or  increased  in  exact  proportion 
to  the  demands  of  the  population,  it  would  thereby 
be  enabled  to  sustain  such  an  even  and  unvarying 
value  as  money  should  have,  but,  of  course,  that  is 
impossible.  On  the  contrary,  it  is  possible  and  even 
probable  that  advanced  processes  in  mining  and  in 
chemistry  will,  in  the  near  future,  cause  very  erratic 
variations  in  the  value  of  gold.  We,  therefore,  see 
that  in  using  gold  as  money,  we  are  violating  one  of 
the  simiDlest  laws  of  mechanics,  which  demands  that 
the  material  out  of  which  an  article  is  constructed 
shall  be  that  material  which  is  best  adapted  to  the 


100  THE    AUTOMATIC    SYSTEM 

uses  to  which  that  article  is  proposed  to  be  put. 
Those  nations  which  use  silver  as  money  are  violat- 
ing the  same  rule.  At  the  present  epoch  in  the  his- 
tory of  man  (speaking  now  simply  of  his  material 
interests  while  in  this  life)  three  certain  different 
things  constitute  the  most  important  matters  with 
which  he  has  any  relationship.  Those  things  are 
land,  labor  and  money.  Land,  of  course,  was  a  neces- 
sary condition  j)recedent  to  the  existence  of  human- 
ity at  all  in  its  present  form.  Labor  is  the  means  by 
which  man  gains  from  the  land  those  products  neces- 
sary for  his  material  welfare;  and  money  is  the 
means  by  which,  living  in  a  state  of  society,  he  is  en- 
abled to  organize  a  division  of  labor  amongst  his 
kind  and  to  exchange  the  product  of  one  class  of 
laborers  for  the  product  of  another  class.  This  be- 
ing the  true  use  of  money,  does  it  not  appeal  to  your 
reason  that  if  such  a  responsible  government  as  I 
have  above  mentioned  is  going  to  issue  its  promises 
to  pay  to  be  used  as  money,  that  such  promises  ought 
not  to  be  made  redeemable  in  any  particular  product 
of  labor,  such  as  gold  or  silver  (which  are  just  as 
much  products  of  labor  as  iron  or  steel),  but  that  the 
money  ought  to  be  redeemable  in  that  thing  which 
produces  all  commodities,  and  which  God  has  pro- 
vided in  exact  proportion  to  the  population,  to-wit: 
labor  or  service  itself?  When  yon  have  such  a 
money,  and  enact  a  law  levying  an  automatic  tax 
upon  it,  under  a  system  by  which  the  tax  can  not  be 
evaded,  then  3'on  will  have  real  money — money  that 
will  act  like  the  blood  in  the  human  system — money 
which  (because  of  the  ability  of  the  government  to 
do  more  service  for  a  given  price  than  a  private  cor- 


THE    AUTOMATIC    SYSTEM  101 

poration  is  willing  to  do)  would  be  more  valuable 
when  spent  than  any  money  which  we  use  at  present 
(but  which,  if  hoarded,  would  be  automatically 
taxed) — money  w^iich  you  employers  of  labor, 
through  self  interest,  would  reinvest  as  fast  as  you 
got  it.  In  other  words,  you  would  get  your  profit  in 
money,  but  would  promptly  reinvest  all  suriDlus 
above  a  working  capital  in  some  form  of  material 
wealth;  and  as  all  material  wealth,  aside  from  land, 
is  the  product  of  labor,  the  money  would  be  contin- 
ually sent  down  into  the  hands  of  the  laborers.  You 
gentlemen  know  that  it  can  not  get  out  at  that  end, 
but  that  it  must  come  back  up  through  the  channels 
of  trade  into  your  pockets  again.  In  other  words,  it 
is  my  contention  that  our  i3resent  commercial  system 
is  in  a  sickly  condition,  and  what  I  am  trying  to  do  is 
to  improve  and  correct  the  quality  and  circulation  of 
its  blood,  to  the  end  that  the  system  may  acquire 
more  fat  than  it  has  at  present.  It  is, to  the  interest 
of  such  of  you  as  are  merchants,  middlemen  and 
manufacturers,  in  legitimate  business,  to  have  this 
done,  and  hence  it  is  that  I  say  you  will  be  in  favor 
of  this  plan,  it  being  a  law  in  human  nature  for  a 
man  to  be  in  favor  of  that  which  is  to  his  advantage. 
But  to  go  back  to  those  men  who  are  the  bond 
holders  and  stock  holders  of  the  large  industries 
which  so  man3^  people  think  the  government  should 
run;  Those  men  are  going  to  laugh  very  heartily  at 
the  idea  of  giving  every  citizen  of  this  country  a 
small  pension.  Yet  those  same  men  do  not  think  it 
is  at  all  ridiculous  when  they  receive  dividends  on 
their  stock,  but  their  dividends  are  not  called  ''pen- 
sions."   Well,  my  friend,  if  vou  so  dedre,  you  can 


102  THE    AUTOMATIC    SYSTEM 

call  the  small  amount  which  you  will  receive  from 
the  government  each  month  a  ' '  dividend ' '  instead  of 
a  * '  pension. ' '  In  the  future,  the  people  at  large  will 
be  the  stockholders  in  the  industries  controlled  by 
the  government,  and  if  the  government  shall  run 
those  industries  with  a  small  profit  as  a  margin  of 
safety,  then,  after  enough  has  been  accumulated  to 
guarantee  that  safety,  each  citizen  should  receive  his 
share  of  any  surplus  in  the  shaj^e  of  a  dividend  once 
a  month,  and  the  matter  will  be  no  more  laughable  than 
it  is  now,  when  those  profits  are  paid  into  tlie  pockets 
of  a  few. 

' '  Oh,  but, ' '  these  men  will  say  to  you, ' '  you  poor 
people  have  always  talked  about  what  a  terrible 
thing  interest  is,  and  now  yow  are  going  to  have  to 
pay  a  great  big  interest  all  the  time  on  money." 
Well,  now,  let  us  see:  Suppose  you  are  a  farmer 
and  need  money.  You  go  and  borrow  $1,000.00. 
Now,  you  don't  borrow  that  money  to  hoard,  and  if 
you  don't  hoard  it,  you  will  not  have  to  pay  any  tax 
on  it.  You  borrow  it  because  you  need  it  to  spend. 
After  you  have  spent  it,  someone  else  will  have  to 
pay  the  tax  on  it,  and  if  anybody  gets  hold  of  that 
money  and  tries  to  hoard  it,  it  will  be  taxed  once 
each  month.  You  go  to  a  man  today  who  has  money 
and  he  will  charge  you  interest  for  a  loan,  but  in  the 
future,  with  the  money  I  suggest,  a  man  will  lend 
you  $1,000.00  for  a  year  without  interest  on  condition 
that  you  will  pay  him  back  $1,000.00.  He  will  be 
glad  to  do  that,  because  by  that  means  he  will  be 
able  to  hoard  that  much  money  for  a  year  without 
having  it  diminished  in  amount  by  the  automatic  tax, 
that  is,  the  money  will  go  on  circulating  and  being 


THE    AUTOMATIC    SYSTEM  103 

taxed,  but  at  the  end  of  the  year,  when  you  pay  the 
man  back,  he  will  be  in  the  same  position  as  if  he 
had  succeeded  in  hoarding  $1,000.00  without  having 
it  taxed.  He  will  not  pay  the  tax  on  it,  and  neither 
will  you  pay  the  tax  on  any  considerable  portion  of 
it,  because,  if  you  borrow  it  at  all,  it  will  be  for  the 
purpose  of  spending  it.  You  will  spend  it  at  its  full 
thousand-dollar  face  value,  and  you  will  get  more 
for  that  $1,000.00  that  you  borrow  without  interest 
than  you  can  get  today  for  any  $1,000.00  that  exists, 
because,  as  before  explained,  when  the  government 
operates  these  different  industries,  $1,000.00  will 
have  a  larger  purchasing  capacity  than  it  has  now. 
You  will  only  have  to  pay  tax  on  it  for  that  portion 
of  the  time  when  you  are  accumulating  a  fund  to  re- 
turn the  loan  and  then  not  upon  the  full  amount, 
but  only  on  such  portion  as  you  may  have  accumu- 
lated towards  the  i^ayment  of  the  loan,  and  if  you 
should  have  misfortune  and  not  be  able  to  accumu- 
late any  money  for  awhile,  you  would  not  be  paying 
a  tax  during  that  time,  but  today,  no  matter  how  un- 
fortunate you  are,  the  interest  on  a  loan  keeps  right 
on  running  on  the  full  amount.  It  will  be  found  that 
the  man  of  ordinary  means  will  always  receive  more 
in  the  shape  of  pension  than  he  pays  out  as  money 
tax. 

The  kind  of  interest  that  will  have  to  be  paid  by 
the  man  who  hoards  the  money  is  not  the  kind  of 
interest  that  will  injure  humanity.  Let  me  tell  you 
what  kind  of  interest  it  is  that  is  harming  society 
today:  Do  you  know  that  there  is  scarcely  a  toll 
bridge,  a  water  works  system,  an  electric  light  or  gas 
system,  or  a  railroad  in  this  country  at  the  present 


104  THE    AUTOMATIC    SYSTEM 

time  which  was  not  built  largely  out  of  funds  raised 
by  issuing  bonds?  Do  you  know  that  when  extensive 
betterments  are  required  to  be  made  on  this  class  of 
property  that  those  betterments  are  frequently  made 
by  issuing  bonds  ?  Do  you  know  that  when  these  va- 
rious bonds  become  due  they  are  usually  paid  by  a 
re-issue  of  bonds  ?  Do  you  know  that  when  they  are 
issued  in  the  first  place  they  often  provide,  in  addi- 
tion to  the  annual  interest,  for  a  sinking  fund  of  only 
one  or  one  and  a  fraction  per  cent.?  Do  you  know 
that  a  computation  of  the  time  which  the  bonds  have 
to  run  in  connection  with  the  sinking  fund  often  de- 
velojDS  the  fact  that  the  sinking  fund  is  not  sufficient 
to  retire  the  bonds'?  In  other  words,  that  when  the 
bonds  are  issued  it  is  not  contemplated  that  they  will 
be  paid  in  full,  but  that  new  bonds  will  have  to  be 
issued  for  part  of  the  payment?  Do  you  know  that 
the  stock  holders  who  own  the  valuable  franchises 
under  which  these  great  public  utilities  are  built  and 
operated  usually  furnish  only  a  small  percentage  of 
the  money  necessary  to  build  them,  and  that  the  issu- 
ance of  bonds  provides  the  remainder  of  the  neces- 
sary money!  And  do  you  know  that  the  bonds  are 
seldom  sold  at  their  full  face  value,  but  that  it  is  a 
fact,  in  order  to  get  capitalists  to  invest,  a  greater 
amount  of  bonds  has  to  be  issued  than  the  amount 
which  the  stock  holders  require  to  assist  them  in 
building  the  property?  In  other  words,  that  these 
great  public  utilities  are  often  not  only  loaded  down 
with  interest-bearing  bonds  to  the  amount  of  the 
money  borrowed  to  build  them,  but,  in  addition,  out 
of  their  earnings  there  actually  has  to  be  paid  inter- 


THE    AUTOMATIC    SYSTEM  105 

est  on  money  which  never  went  into  their  construc- 
tion at  all  ? 

I  do  not  blame  anybody  in  particular  for  this 
state  of  affairs.  It  has  simply  come  about  in  a 
natural  manner.  It  is  a  condition  born  out  of  the 
womb  of  the  past,  but  it  is  a  most  serious  condition. 
Who  pays  the  interest  on  these  bonds?  The  people 
of  the  United  States  do !  How  much  longer  are  they 
going  to  pay  it?  It  disgusts  me  when  I  think  of  the 
great  number  of  public  speakers  and  newspapers  in 
this  country  today  that  get  up  a  great  argTiment  for 
or  against  either  party  based  on  the  fact  that  some 
national  or  state  administration  spent  one  or  two 
million  dollars  of  the  people 's  money  more  than  some 
other  administration  did  in  a  given  length  of  time, 
or  less  than  some  other  administration  did.  The 
eyes  of  the  great  intelligent  people  of  the  United 
States  flash  with  indignation  when  they  discover 
that  there  has  been  a  small  waste  of  public  money, 
but  they  stand  by  like  stupid  oxen  and  pay  the  in- 
terest on  these  bonds,  and  most  of  them  don't  even 
know  they  are  paying  it.  They  are  paying  it,  how- 
ever, for  before  the  stock  holders  get  their  profit  they 
are  forced  to  pay  out  of  the  earnings  of  the  property 
the  interest  on  the  bonds,  and  on  account  of  these 
bonds  the  general  public  pays  more  for  what  it  re- 
ceives from  the  franchise  holders,  and  the  laborer 
receives  less  i^ay.  There  is  not  a  bite  of  bread  or  a 
pound  of  steak  that  you  eat  and  not  a  piece  of  cloth- 
ing that  you  wear  but  what  is  higher  in  price  today 
because  of  exorbitant  freight  rates,  than  it  would  be 
under  proper  freight  rates.  The  various  state  Leg- 
islatures are  beginning  to  protect  the  general  public 


106  THE    AUTOMATIC    SYSTEM 

by  placing  a  maximum  rate  on  the  services  of  rail- 
roads. On  the  other  hand,  the  employes  of  railroads 
are  forming  unions  to  keep  from  being  too  much 
oppressed  on  their  end  of  the  proposition.  These  two 
things,  working  from  opposite  directions,  of  course, 
have  a  tendency  to  curb  the  greed  of  the  stock 
holders  and  bond  holders  of  railroad  corporations, 
but  it  is  plainly  to  be  seen  that  if  the  various  state 
Legislatures  were  to  become  severe  in  this  matter 
with  reference  to  both  freight  and  passenger  ser- 
vice, the  strain  would  be  so  great  that  something 
would  have  to  give  way.  Supposedly  the  law  of  the 
state  would  be  the  strongest  element  in  the  proposi- 
tion. Therefore  either  the  stock  and  bond  holders 
would  have  to  suffer  or  else  the  wage  rates  fixed  by 
the  labor  union  would  have  to  be  broken,  and  the 
money  to  pay  the  interest  on  the  bonds  would  have 
to  be  gained  by  grinding  down  the  employes  of  the 
railroad.  When  things  reached  that  strained  condi- 
tion, I  tremble  to  think  what  the  fate  of  the  poor 
employes  will  be.  As  things  are  now,  the  employes 
frequently  find  it  necessary  to  strike,  and  even  when 
the  strike  is  submitted  to  arbitration,  they  sometimes 
lose  it,  for  the  officers  of  the  corporation  are  enabled 
to  bring  in  their  books  and  make  a  showing  to  the 
effect  that  they  can  not  pay  higher  wages.  They 
show  that  their  gross  earnings  for  the  year  past  were 
so  much.  Then,  as  against  those  earnings,  they  show 
that  the  interest  on  honds  was  so  much;  that  taxes, 
repairs,  betterments,  etc.,  amounted  to  so  much. 
Then  they  add  in  the  wages  paid  to  their  employes, 
and  show  that  the  total  adds  up  to  such  a  large  sum 
that  they  are  able  to  declare  a  dividend  of  only  one 


THE    AUTOMATIC    SYSTEM  107 

or  one  and  a  half  per  cent,  for  the  poor  stock  holders, 
and  the  board  of  arbitration  is  asked  to  decide  in 
favor  of  the  company.  Why  does  not  some  represen- 
tative of  the  strikers  force  the  company  to  show  how 
much  cash  was  ever  put  into  that  railroad  by  the 
stock  holders  when  it  was  originally  started  and  how 
much  since  that  time,  so  that  tlie  board  of  arbitration 
may  know  whether  that  one  per  cent,  dividend  is  on 
money  really  invested  or  on  watered  stock  ?  Why  is 
the  company  not  required  to  show  whether  the  bonds 
on  which  it  pays  interest  were  sold  for  full  face  value 
or  whether  interest  is  being  paid  on  money  which 
never  went  into  the  road?  Why  is  it  not  required  to 
show  the  amount  of  the  dividends  paid  to  its  stock 
holders  in  the  past,  so  that  the  board  may  see 
whether  or  not  the  stock  holders  have  long  since  re- 
ceived dividends  which  sucked  the  blood  from  the 
corporation,  and  part  of  which  might  well  have  been 
invested  for  the  corporation  as  an  offset  to  the  out- 
standing interest-bearing  bonds?  Why  does  not  the 
board  investigate  and  see  who  are  the  bond  holders 
and  who  are  the  stock  holders,  so  that  they  may 
know  whether  the  bond  holders  have  bought  out  the 
stock  holders,  or  whether  the  stock  holders  have 
bought  out  the  bond  holders?  A  bond  holder  whose 
interest  had  ruined  the  company,  and  forced  its  stock 
holders  to  sell  him  the  stock  at  a  low  i3rice,  could 
afford  to  pay  an  assessment  in  his  new  capacity  as 
stock  holder,  and  thus  let  the  men  have  fair  wages, 
and  a  stock  holder  who  had  received  such  big  divi- 
dends in  the  past  as  to  enable  him  to  purchase  the 
bonds  could  also  afford  to  pay  an  assessment. 

Now,  do  not  think  for  a  moment  that  I  favor  any 


108  THE    AUTOMATIC    SYSTEM 

plan  by  which  this  vast  amount  of  bonds  should  be 
repudiated.  The  honor  and  integrity  of  this  nation 
and  of  its  people  must  be  preserved  at  every  cost. 
Repudiation  is  the  weak  expedient  of  the  coward. 
I  say  to  you  that  the  great  common  people  of  America  are 
strong  enough  and  resourceful  enough  to  work  out  the  prob- 
lem of  their  future  prosperity  by  means  which  are  honest 
and  just,  both  in  theory  and  in  practice;  but  I  do 
say  that  the  matter  should  be  taken  in  hand  and  so 
managed  that  conditions  in  this  respect  will  improve 
instead  of  growing  worse.  If  the  United  States  gov- 
ernment had  run  these  great  bonded  public  utilities, 
they  would  be  on  a  cash  basis  by  this  time.  Every 
dollar  of  these  bonds  would  have  long  since  been 
paid,  and  the  people  would  not  now  be  paying  inter- 
est on  them.  In  addition  to  this,  the  United  States 
would  not  want  a  profit,  as  in  the  case  of  a  private 
stock  holder.  Therefore  the  public  would  be  served 
better  and  cheaper  and  the  laborer  would  work  less 
hours  and  receive  more  pay  and  more  laborers 
would  be  employed. 

But  to  return  to  the  money  tax :  The  poor  man, 
who  does  not  handle  much  money,  will  pay  a  very 
small  sum  in  taxes  on  it,  while  the  rich  man,  who 
handles  more  money,  will  pay  more.  This  tax,  it 
may  be  mentioned  in  passing,  will  accomplish  all 
that  is  sought  to  be  accomplished  by  those  who  advo- 
cate a  graduated  income  tax,  but  it  will  not  be  class 
legislation,  because  it  will  apply  to  every  citizen.  It 
will  be  more  beneficial  than  a  graduated  income  tax, 
however,  as  (in  the  case  of  an  income  tax)  the  re- 
mainder of  the  money,  after  the  tax  has  been  paid, 
will  be  hoarded,  or  held  at  interest,  while  in  the  case 


THE    AUTOMATIC    SYSTEM  109 

of  the  automatic  tax  which  I  propose,  the  entire  cash 
capital  of  a  man  will  be  whacked  at  by  a  1  per  cent, 
automatic  tax  once  every  month  until  he  learns  that, 
while  money  is  a  representative  of  value,  it  is  also  a 
medium  of  exchange,  and  that  its  usefulness  to  mankind 
consists  in  the  latter  quality  rather  than  in  the  former. 
As  against  the  small  amount  which  a  poor  man  will 
pay  on  account  of  the  money  tax,  he  will  every  month 
receive  a  great  deal  more  than  that  amount  in  pen- 
sion money,  and  in  addition  will  be  benefited  in  his 
ordinary  source  of  income  by  receiving  higher 
wages  and  doing  better  in  whatever  line  he  may  be 
engaged.  Now,  I  suppose  that  some  people  will 
think  they  see  a  point  at  about  this  place : 

"How  can  it  be,"  they  will  ask,  "that  both  the 
employed  and  the  employers  will  be  benefited!  It 
sounds  very  nice,  but  we  all  know  that  if  we  give  one 
class  a  larger  profit,  the  other  class  must  suffer  for 
it."  The  reason  that  both  classes  will  be  benefited 
and  make  a  larger  profit  is  that  there  will  be  more 
profits  to  be  divided.  In  other  words,  there  will  be 
more  material  wealth  produced.  There  will  be  more 
labor  employed,  and  every  line  of  industry  will  be 
more  active,  and  mankind  as  a  whole  will  joroduce 
more  from  the  earth,  and,  therefore,  mankind  as  a 
whole  will  have  greater  prosperity.  The  old-fash- 
ioned way  has  been  for  people  to  try  to  live  off  of  one 
another.  Instead  of  co-operating  in  the  production 
of  wealth,  they  are  content  to  let  as  small  a  portion 
of  the  community  as  possible  produce  the  wealth, 
and  then  try  to  get  it  way  from  them  in  the  channels 
of  trade,  even  if  they  have  to  stop  the  production  of 
wealth  to  do  it,  as  in  the  case  of  the  large  trusts. 


110  THE    AUTOMATIC    SYSTEM 

which  are  closing  up  factories  in  this  country  today. 
The  plan  I  advocate  is  desirable  because  it  is  automatic  in 
its  operation.  It  does  not  force  mankind  to  wait  until 
each  individual  citizen  becomes  a  good  citizen  and  a 
public-si^irited  citizen  before  we  reach  that  stage  of 
social  welfare  which  such  an  ideal  condition  would 
pi'oduce,  but,  recognizing  the  greed  and  selfishness 
and  weakness  of  the  individual  members  of  society, 
it  puts  those  individuals  in  a  situation  where  they 
are  compelled  to  follow  out  a  system  of  unquestion- 
able advantage  to  humanity  as  a  whole,  enforcing 
upon  them  only  such  regulations  as  will  benefit  them, 
leaving  them  in  full  and  perfect  control  of  the  per- 
sonal liberties  which  they  value  so  highly,  and  pre- 
venting them  from  harming  the  rest  of  society  in  the 
exercise  of  those  liberties,  by  means  of  absolutely 
just  and  self-enforcing  laws.  Nor  will  the  pension 
mentioned  above  be  class  legislation,  because  every 
citizen  under  the  government  will  receive  the  same 
amount  of  pension,  except  those  who  will  receive 
special  pensions  for  special  reasons,  as  at  present. 

Now,  you  business  men  may  be  of  the  opinion 
that  it  will  be  a  great  bore  to  stand  in  line  once  a 
month  and  wait  to  get  your  money  exchanged  for 
the  next  month's  money,  but  it  will  not  be  necessary 
for  you  to  do  that  at  all.  The  banks  of  the  country 
or  government  banks  established  for  that  purpose 
will  do  that  business  for  you  once  a  month,  and  your 
account  in  bank  will  be  debited  by  the  bank  with  the 
amount  of  the  tax  which  it,  the  bank,  had  to  pay  the 
government  on  your  funds.  These  proposed  laws 
which  I  mention  are  very  good  laws  for  the  well-to-do 
men  of  this  country,  as  well  as  the  poor  men,  because 


THE    AUTOMATIC    SYSTEM  111 

after  these  laws  are  in  force,  rich  men  can  still  hoard 
gold  and  silver  and  precious  stones.  There  is  no  ob- 
jection to  that.  I  don't  care  if  they  get  possession 
of  every  ounce  of  gold  and  silver  now  mined  and  all 
the  precious  stones  that  have  been  discovered  since 
the  beginning  of  time.  What  I  am  trying  to  do  is  to 
arrange  it  so  that,  after  they  have  gotten  all  that, 
they  can  still  go  on  and  become  richer,  by  becoming 
rich  in  all  classes  of  material  wealth  which  labor  can 
produce.  At  present  they  are  like  the  fishermen  I 
mentioned  awhile  ago.  They  limit  their  ability  to 
become  rich,  because,  instead  of  using  money  actively 
as  a  means  of  exchange,  which  will  make  them  rich 
in  material  wealth,  they  value  it  as  a  convenient  form 
of  hoarding  wealth.  In  addition  to  becoming  rich 
in  money,  if  men  will  operate  under  a  system  that 
will  keep  labor  employed,  and  keep  the  wheels  of 
machinery  turning,  they  can  become  rich  in  material 
wealth  also,  as  they  did  in  biblical  times,  when  men 
considered  themselves  wealthy  if  they  owned  great 
herds  and  wool  and  wine  and  spices  in  addition  to 
their  gold  and  precious  stones.  The  only  difference 
is  that  now  the  means  of  becoming  rich  in  material 
wealth  are  much  more  numerous  than  in  those  olden 
days.  The  proper  use  of  money  by  a  business  man  is 
for  him  to  stop  hoarding  it,  and  make  it  his  servant, 
to  the  end  that  he  may  become  rich  in  the  manner  I 
have  mentioned. 

Men  of  large  business  interests  have  gotten  into 
a  habit  of  thinking  that  the  community  depends 
upon  them,  when,  as  a  matter  of  fact,  like  all  other 
citizens,  they  depend  upon  the  community.  Appear- 
ances have  the  reputation  of  being  deceiving,  and  it 


112  THE    AUTOMATIC    SYSTEM 

is  not  always  that  a  man  who  appears  to  be  of  gi'eat 
importance  in  a  community  is  actually  so.  We  will 
take  the  case  of  three  hat  manufacturers.  We  will 
say  that  they  are  men  of  high  social  position,  are 
well  educated,  have  large  bank  accounts  and  are 
generally  regarded  as  pillars  of  society  and  the 
church.  Now,  these  manufacturers  meet  and  try  to 
do  business  with  one  another.  One  of  them  says, 
''Here  is  a  style  of  hat  that  I  will  sell  you  for  one 
dollar  per  hat."  The  other  two  manufacturers  say, 
**No,  we  can't  give  you  a  dollar  per  hat.  We  sell 
that  kind  for  a  dollar  apiece  ourselves,  but  we  will 
give  you  eighty-five  cents  per  hat  for  that  style." 
''No,"  the  first  hat  manufacturer  says,  "they  cost 
me  as  much  as  eighty-five  cents  each  to  manufacture 
them,  but  I'll  tell  you  what  I'll  do,  since  you  gentle- 
men also  manufacture  this  same  style  of  hat,  rather 
than  have  the  trouble  of  manufacturing  them  myself, 
I  will  give  you  eighty-five  cents  each  for  them." 
"No,"  say  the  other  two,  "we  want  to  get  a  dollar 
apiece  for  them."  In  other  words,  each  wants  the 
best  of  it.  At  any  rate,  it  is  against  self  interest  and 
human  nature  for  either  to  take  the  worst  of  it,  and 
the  case  would  be  the  same  if  the  group  of  men  I 
have  mentioned  had  been  composed  of  shoe  manu- 
facturers or  manufacturers  in  other  lines  of  business. 
No  manufacturer  would  knowingly  pay  more  for  a 
thing  to  another  manufacturer  than  he  could  produce 
the  article  for  himself.  Now,  does  a  single  wheel  of 
commerce  turn  as  the  result  of  any  dealings  these 
men  have  with  one  another?  Well,  yes,  when  one  of 
them  is  forced  by  temporary  necessity  or  through  the 
superior  business  sagacity  of  a  rival  to  patronize  that 


THE    AUTOMATIC    SYSTEM  113 

rival,  the  wheels  do  turn  stiffly  and  unwillingly. 
But  in  order  to  have  the  wheels  turn  briskly,  we 
have  to  have  one  of  the  workmen  who  is  employed 
in  one  of  those  hat  factories,  or  in  some  other  factory, 
go  down  town  Saturday  night  and  pay  for  one  of 
those  hats,  not  only  the  one  dollar  which  the  manu- 
facturer wants,  but  also  a  profit  to  the  merchant  who 
sells  him  the  hat.  Then  we  have  found  a  man  who  is 
willing  to  take  the  worst  of  it;  then  we  see  that  a 
trade  is  made  and  that  the  wheels  of  the  hat  factory 
turn,  and  then  we  have  discovered  that  the  man  who 
works  in  the  factory  is  as  valuable  to  society  as  the 
man  who  owns  the  factory.  Now,  while  this  is  true, 
it  is  not  my  intention  that  the  illustration  which  I 
have  just  given  you  should  prejudice  your  mind 
against  the  employers  of  labor.  I  am  not  seeking  to 
produce  discord,  but  am  endeavoring  to  bring  about 
co-operation.  There  is  a  reason  why  the  employer 
will  not  enter  into  a  contract  under  which  he  gets 
less  than  he  gives.  He  can  not  afford  to!  The 
laborer  can  afford  to!  This  may  not  be  the  way  in 
which  you  have  been  in  the  habit  of  thinking  of  this 
subject,  but  it  is  true,  as  I  will  show  you:  If  an 
employer  does  business  at  a  loss  and  continues  to  do 
so,  his  ultimate  failure  will  be  the  result.  But  if  a 
laborer  produces  a  certain  value  in  the  products  of 
labor,  and  receives  for  his  labor  a  less  sum  than  those 
products  are  worth,  nevertheless,  if  the  sum  which 
he  does  receive  is  large  enough  to  support  him  in  com- 
fort, then  he  can  go  on  laboring  as  long  as  he  lives 
(constantly  giving  more  than  he  receives)  and  yet 
be  prosperous  and  become  richer  every  day.  Under 
proper  conditions,  laborers  can  do  this  as  a  class 


114  THE    AUTOMATIC    SYSTEM 

and  still  be  very  prosperous,  but  if  the  employers  as 
a  class  were  expected  to  do  business  at  a  loss,  the 
whole  commercial  world  would  totter  and  fall.  It 
becomes  evident,  then,  that  the  employers  can  not 
in  reason  be  expected  to  supj)ort  the  laboring  classes, 
because  of  the  simple  fact  that  the  employers  are  un- 
able to  do  so.  It,  therefore,  follows  that  the  laboring- 
classes  are  the  ones  who  must,  and  do,  support  both 
themselves  and  their  employers.  The  reason  for  this 
is  very  simple:  The  laboring  classes  are  in  them- 
selves the  source  of  all  wealth.  They  produce  all 
wealth.  God  gives  them  the  ability  to  produce 
wealth  and  charges  them  nothing  for  their  stock  in 
trade,  which  is  labor.  If  you  employers  will  only 
realize  this  fact,  you  will  see  that  a  proper  co-opera- 
tion between  employers  and  laborers  is  just  as  much 
to  be  desired  by  the  employers  as  by  the  laborers. 
And  as  for  the  laborers,  if  they  will  give  me  their 
attention,  I  will  convince  them  that  (under  a  proper 
system)  employers  are  very  valuable  to  them,  and 
that  they  can  well  afford  to  give  a  part  of  the  product 
of  their  labor  to  men  who  will  organize  and  manage 
industries  employing  labor,  if  those  men  will  only  do 
so  under  proper  conditions.  The  efforts  at  labor  of 
the  primitive  man  must  have  had  little  about  them  to 
justify  their  being  dignified  by  the  name  of  labor,  or 
to  distinguish  them  from  mere  animal  habits.  I  can 
imagine  a  man  of  that  period.  Living  in  a  savage 
state,  guided  largely  by  instinct,  and  but  little  by 
reason,  I  see  him  in  my  mind's  eye  at  a  time  when 
society  was  so  much  a  thing  of  the  future  that  he  was 
without  tribal  connections,  and  even  the  family  rela- 
tion wai  but  poorly  developed.    I  see  him  clamber- 


THB    AUTOMATIC    SYSTEM  115 

ing  down  the  mountain-side,  pushing  his  way- 
through  the  underbrush,  leaping  over  the  trunks  of 
huge  trees  and  entering  into  the  dark  shadows  of 
some  mammoth  forest.  Volcanic  forces  have  per- 
haps long  since  bodily  lifted  and  overturned  both 
the  mountain  and  the  forest  and  converted  them  into 
beds  of  mineral,  but  in  my  vision  of  the  interminable 
past,  I  can  see  this  primitive  man  approaching  the 
entrance  to  the  cave  which  has  supplied  himself  and 
family  with  a  den  in  which  to  live.  I  can  see  him 
pause  before  it  and  examine  a  large  rock  which  has 
detached  itself  from  the  clilf  above  and  now  blocks 
the  passage  to  his  domicile.  Now,  I  can  see  a  faint 
light  of  reason  flash  across  his  countenance.  He 
looks  upward.  He  sees  the  place  from  which  the 
rock  was  detached.  The  falling  of  rocks  from  cliffs 
has  been  a  matter  within  his  experience,  and  hence 
he  looks  upward  for  the  cause  of  this  rock  being 
where  he  finds  it.  This  is  a  hopeful  sign.  It  is  a 
little  circumstance  which  indicates  a  slight  reason- 
ing faculty.  My  imagination  does  not  tell  me  whether 
my  primitive  man  takes  the  situation  philosophically 
or,  clenching  his  hand  and  raising  it  on  high,  curses 
some  unfriendly  power  for  the  situation  in  which  he 
finds  himself,  but  I  can  see  him  approach  the  rock 
and  attempt  to  move  it.  He  fails.  He  tries  again 
with  redoubled  effort.  He  grunts  in  his  struggle. 
He  stops  and  sits  down  upon  a  fallen  limb  and  all 
the  physical  and  mental  forces  within  him  acknowl- 
edge defeat.  And  now  I  can  see  another  primitive 
man  appear  upon  the  scene.  He  may  be  the  brother 
or  father  or  son  of  the  first  one.  Perhaps  even  their 
own  memories  are  cloudy  on  that  point,  but  I  can  see 


116  THE    AUTOMATIC    SYSTEM 

the  second  man  repeat  the  performance  of  the  first 
with  the  same  result.  I  can  see  first  one  and  then 
the  other  make  renewed  efforts  to  remove  the  offend- 
ing rock.  And  now,  by  what  some  people  would  call 
accident,  I  can  see  that  the  forces  which  underlie 
all  human  action  have  caused  those  two  men  to  make 
the  attempt  at  the  same  time.  They  both  try  to  re- 
move the  rock,  and  before  either  has  exercised  his 
full  strength,  the  rock  trembles  and  moves  and  rolls 
away,  and  during  the  operation  I  have  seen  intellect 
again  at  work.  It  has  lighted  the  faces  of  both  men. 
It  has  flashed  from  the  eyes  of  one  to  the  other,  and 
now  they  know  the  value  of  combined  effort.  Labor 
has  been  accompanied  by  reason  instead  of  grunts, 
and  that  fire  of  intellect  has  been  kindled  which  in 
later  ages  is  to  enable  the  mind  of  a  Darwin  to  throw 
light  back  upon  the  dark  prehistoric  era  in  which 
my  primitive  man  lives. 

I  am  not  able,  and  it  is  not  my  intention,  to  start 
in  and  trace  the  history  of  social  evolution  back  to 
the  period  of  the  poor  savages  whom  I  have  used  in 
my  illustration  above,  nor  is  it  necessary,  for  with- 
out my  doing  so,  it  must  be  apparent  to  every  laborer 
that  the  value  of  his  labor  does  not  consist  in  the 
mere  brute-like  strength  which  his  muscles  possess, 
but  that  labor  is  only  valuable  when  intelligently 
directed  and  properly  organized.  Not  going  into  the 
question  of  wiiat  constituted  the  earliest  tendencies 
toward  the  proper  use  of  labor,  but  restricting  my 
observations  to  the  century  now  coming  to  a  close, 
it  will  take  but  little  effort  on  my  part  to  convince 
my  laboring  friends  that  during  that  century  the 
most  effective  force  at  work  in  developing  the  pos- 


THE   AUTOMATIC    SYSTEM  117 

sibilities  of  labor  as  a  welth-producing  agency  has 
been  private  capital,  which  in  its  own  interest  has 
been  continually  devising  means  of  getting  the  best 
results  from  the  least  labor.  Now,  understand  me,  I 
do  not  claim  that  labor  has  received  its  just  portion 
of  the  wealth  it  has  produced,  or  that  it  has  been 
given  the  opportunity  to  produce  as  much  wealth  as 
it  could,  of  which  it  might  have  received  a  portion, 
but  I  do  claim  that,  if  the  government  will  put  into 
force  a  system  under  which  the  laboring  classes  will 
receive  their  just  proportion  of  the  wealth  they  pro- 
duce, as  outlined  in  this  book,  and  under  which  they 
will  all  receive  employment,  then  the  valuable  ser- 
vice   which   private    capital     and     enterprise    has 
rendered  to  labor  will  become  apparent,  and  in  the 
future,  as  the  employing  class  continues  to  devise 
means  of  increasing  the  wealth-producing  capacity 
of  the  laborers  whom  they  employ,  both  classes  will 
profit  by  the  process  and  poverty  will  become  a  thing 
of  the  past.    Although  all  laborers  who  desire  it  will 
receive  work,  and  although  their  wealth-producing 
capacity  will  be  continually  augmented,  nevertheless 
none  of  this  wealth  will  be  regarded  as  over-produc- 
tion, but  the  wheels  of  industry    will    turn    faster 
and  faster. 

My  friends,  we  can  do  without  gold  and  silver, 
but  we  can  not  do  without  labor.  If  gold  were  to  be 
produced  in  large  quantities,  the  law  applicable  to 
all  commodities  would  apply,  and  gold  would  lose  its 
value.  Of  course,  a  quantity  of  gold  equal  to  the 
gold  in  a  dollar  would  always  be  worth  a  dollar,  but 
what  I  mean  is  that  the  purchasing  ability  of  the 
dollar   itself    would    be    decreased.     The    interest- 


118  THE    AUTOMATIC    SYSTEM 

drawing  capitalist  of  today  may  hug  his  gold  bags 
to  his  bosom  and  fondly  imagine  that  the  time  is  far 
off  when  this  will  take  place,  but  if  he  is  wise,  ad- 
vanced processes  and  improved  mining  machinery, 
coupled  with  a  larger  field  of  operations,  available 
to  a  greater  number  of  persons,  will  open  his  eyes 
to  the  fact  that  some  day  the  children  to  whom  he 
will  leave  his  gold  may  awake  to  find  that  their 
heritage  has  lost  its  magic  power,  and  that  all  they 
have  of  value  is,  not  that  which  they  received  from 
their  father,  but  that  which  they  received  from  God 
— their  ability  to  labor.  Gold  should  not  be  used  as 
money.  It  is  a  commodity,  and  as  such,  can  not  be 
a  proper  standard  of  value,  for  its  own  value  is  sub- 
ject to  the  same  laws  which  affect  the  value  of  all 
commodities,  and  it,  therefore,  can  not  maintain  that 
even  and  unvarying  value  which  money  should  pos- 
sess. Human  labor  is  the  only  thing  that  God  pro- 
duces in  exact  proportion  as  he  produces  the  human 
race,  and  it  is  the  only  proper  basis  for  money.  Labor 
is  convertible  into  wealth.  A  man  who  is  able  and 
willing  to  work  (even  if  he  is  out  of  emploj^ment 
and  has  no  money)  should  not  be  stigmatized  as  a 
pauper.  He  has  an  equal  share  of  wealth-producing 
power  which  God  gives  to  every  man  whom  He  sends 
into  this  world.  I  have  somewhere  heard  it  said  that 
one  who  takes  more  from  a  community  than  he  gives 
to  that  community  is  a  pauper  on  the  community.  At 
first  blush  this  would  seem  to  be  a  justifiable  defini- 
tion of  a  pauper,  but  on  sober  second  thought  we  will 
see  that  one  of  the  reasons  men  settle  in  communities 
is  that,  by  existing  in  a  state  of  society,  they  may  be 
enabled  to  obtain  a  livelihood  by  their  own  labor  and 


THE   AUTOMATIC   SYSTEM  119 

by  transactions  and  exchanges  with  the  rest  of  the 
community.  Therefore,  if  we  gave  too  much  weight 
to  this  definition  of  a  pauper,  we  would  have  to  say 
that  the  whole  community  were  paupers.  It  would 
seem  that  the  better  version  of  the  definition  would 
be  to  say  that  all  those  who  get  their  living  from  a 
community  without  rendering  in  return  those  duties 
which  good  citizenship  demands  are  paupers  on  the 
community.  I  have  shown  you  elsewhere  in  this  book 
that  at  present  an  employer  of  labor  is  prevented 
from  performing  one  of  the  duties  which  the  good  of 
society  demands,  that  is,  reinvesting  his  money,  be- 
cause of  the  fact  that  if  he  did  so,  he  would  become 
a  sacrifice  to  other  employers  who  would  refuse  to 
invest,  and  therefore,  not  through  any  fault  of  the 
employer,  but  because  of  the  very  system  under 
which  we  live,  many  a  man  who  rides  in  his  own 
carriage  is  today  in  reality  a  pauper  on  the  community, 
in  accordance  with  the  rule  above  laid  down. 

In  writing  this  work,  it  has  been  my  endeavor 
to  say  nothing  that  was  harsh  in  its  nature,  or  calcu- 
lated to  appeal  to  the  prejudice  of  any  man,  being 
well  content  to  present  my  ideas  in  the  simple  light 
of  the  truth  as  it  appears  to  me,  and  even  where  I 
have  mentioned  certain  men  who  are  harmful  to 
society,  it  has  only  been  my  intention  to  treat  the 
question  as  a  political  one — not  as  a  moral  one.  In- 
deed, from  a  moral  standpoint,  under  present  condi- 
tions, I  can  understand  how  a  man  can  occupy  the 
position  of  a  money  lender,  and  feel  that  self  defense 
and  duty  to  himself  and  family  demand  that  he 
should  invest  his  money  so  as  to  draw  the  very 
highest  rate  of  interest  possible.    My  whole  desire 


120  THE    AUTOMATIC    SYSTEM 

is  to  be  honest  and  truthful  with  you,  but  I  am  afraid 
that  some  of  these  men  are  not  going  to  be  so  candid 
with  you.  The  majority  of  them  will  fight  the  meas- 
ures I  advocate,  forgetting  that  (no  matter  what 
their  justification  is  under  present  conditions)  it  is 
their  duty  to  welcome  new  conditions,  from  which 
old  evils  would  be  eradicated,  thus  changing  the 
moral  aspect  of  the  question,  taking  from  them  the 
justification  of  self-defense  and  placing  them  in  the 
position  of  men  who  wilfully  and  wantonly,  through 
self-interest  and  greed,  oppose  that  which  is  destined 
to  abolish  poverty  and  uplift  the  human  race  as  a 
whole.  These  men  will  accuse  me  of  the  very  great- 
est dishonesty  when  I  advocate  the  enforced  sale  of 
all  public  utilities  to  the  national  government.  They 
will  call  it  confiscation.  They  will  howl  about  indi- 
vidual liberty  and  property  rights.*  They  will  act- 
ually weep.  They  will  forget  the  days  when  they 
themselves  asked  the  government  in  their  behalf  to 
exercise  the  right  of  eminent  domain.  Then  they 
sang  a  different  song.  Then  they  said  that  the  good 
of  the  public  was  the  only  thing  to  be  considered,  and 
nothing  was  so  sacred  or  important  but  that  the  good 
of  the  public  and  the  right  of  eminent  domain  were 
not  of  greater  importance !  Not  one  thing!  The  old 
homestead  and  its  cherished  memories,  where  in 
childhood's  happy  days  we  romped  through  the 
sweet-faced  rooms  and  out  into  the  flowery  garden, 
and  where  in  later  years  we  knelt  by  the  bed  of  a 


♦During  the  bankers'  panic  late  In  1907  (seven  years 
after  the  above  was  written),  the  bankers  took  the  view  that 
property  rights  could  be  ignored  in  the  interest  of  the  general 
good  and  refused  to  pay  depositors  on  demand. 


THE    AUTOMATIC    SYSTEM  121 

dying  parent!  The  village  church  whose  bells  once 
gave  glad  acclaim  to  our  happiness,  and  again  sor- 
rowfully tolled  forth  the  tidings  of  our  bereavement! 
The  family  burial  lot,  where  we  had  thought  that  our 
dear  ones  might  rest  with  ashes  undisturbed!  All  of 
these,  it  was  argued,  were  properly  subject  to  en- 
forced sale  when  that  sale  was  necessary  for  the  good 
of  the  public  in  the  laying  of  a  railroad.  I  say  to  you 
that  those  men  were  right  in  so  arguing  at  that  time. 
What  is  it  that  will  make  them  change  their  song  at 
this  time?  Self  interest,  my  friend,  self  interest. 
Don't  let  them  fool  you. 

If  it  shall  be  urged  that  the  kind  of  money  advo- 
cated by  me  is  impracticable,  I  answer  that  even 
today  its  practicability  is  being  demonstrated.  We 
pay  small  bills  with  postage  stamps  very  frequently, 
and  every  manager  of  large  concerns  employing  mes- 
senger boys  in  large  cities  will  tell  you  that  they  have 
great  trouble  when  they  send  a  boy  on  a  long  or  a 
hasty  trip,  for  which  they  give  him  a  car  ticket,  by 
reason  of  the  fact  that  the  boy  very  often  walks  and 
spends  his  car  ticket  in  a  candy  store  or  bake  shop. 
Ask  the  messenger  boys  themselves.  They  will  tell 
you  that  a  street  car  ticket  is  as  good  as  money  and 
can  be  spent  as  such.  If  this  is  true  of  a  small  street 
car  company,  how  much  more  would  it  be  true  if  the 
national  government  ran  all  of  the  great  public  utili- 
ties and  issued  money  redeemable  in  service?* 

It  will  also  be  urged  that  money  bearing  an  auto- 
matic tax  can  not  be  circulated.    I  say  to  you  that 


*During  the  bankers'  panic  late  In  1907,  Capt.  Robert 
McCulloch,  In  charge  of  the  street  railway  lines  of  St.  Louis, 
advocated  the  issuance  by  his  company  of  many  thousands  of 
dollars'  Tvorth  of  street  car  tickets,  tp  be  used  as  nickels. 


122  THE    AUTOMATIC   SYSTEM 

money  should  be  of  that  kind  which  is  most  valuable 
to  the  great  common  people  of  the  country  engaged 
in  honest  avocations  and  legitimate  business  enter- 
prises. Do  not  think  that  this  money  will  be  refused 
by  any  class  of  people  because  of  the  fact  that  it  is 
automatically  taxed.  If  a  man  had  a  hundred  dollars 
in  his  pocket  at  a  given  date,  would  the  mere  fact 
that  in  thirty  days  he  must  exchange  that  hundred 
dollars  for  ninety-nine  dollars  cause  him  to  throw  it 
away  or  refuse  to  take  it?  Would  not  the  ninety-nine 
dollars  be  some  object?  And  if,  through  the  opera- 
tion of  this  kind  of  money,  he  would  be  enabled  to 
get  dollars  more  easily,  and  if  a  sum  much  less  than 
ninety-nine  dollars  of  the  new  money  had  a  greater 
purchasing  power  than  a  full  hundred  dollars  of  our 
present  kind  of  money,  would  not  these  facts  cause 
him  to  be  in  favor  of  the  new  money  and  glad  to 
accept  it?  If  a  man  had  to  have  some  of  this  new 
kind  of  money  before  he  could  buy  his  coal,  or  pay 
his  street  car  fare,  or  pay  freight  charges,  or  railroad 
fare,  or  mail  a  letter,  or  use  the  telegraph,  or  have  a 
telephone  in  his  house,  or  have  electric  light  or 
power,  or  burn  gas,  or  pay  his  water  rates  or  his 
taxes  on  land  and  all  other  taxes,  don't  you  know 
that  he  would  not  refuse  this  money,  but  that  he 
would  accept  it  just  as  eagerly  as  he  does  our  present 
kind  of  money?  The  only  difference  would  be  that 
he  would  not  try  to  hoard  a  large  quantity  of  it,  but 
would  reinvest  it,  and  money  would  circulate  much 
faster  than  it  does  now. 

Money,  to  be  of  service  to  the  people,  must  be 
constituted  with  particular  reference  to  having  Us 
value  da  a  m^iwm  of  ds^'ciidn^e  elxC^M  vts  v^altce  ows:  fi  wi^tts 


THE    AUTOMATIC    SYSTEM  123 

of  hoarding  wealth.  This  should  be  accomplished  by 
having  the  present  purchasing  value  of  the  money 
absolutely  perfect,  but  its  future  purchasing  value 
impaired,  and  having  the  process  of  impairment  so 
gradual  that  it  would  not  destroy  the  perfection  of 
the  present  j^urchasing  value.  The  money  advocated 
in  this  work  will  accomplish  all  these  things. 

If  it  shall  be  urged  that  public  ownership  of  the 
great  public  utilities  will  be  harmful  in  opening  up 
to  political  gangs  new  fields  of  corruption,  I  answer 
that  while  I  believe  in  municipal  ownership  of  cer- 
tain of  those  utilities  as  a  step  leading  to  the  result 
of  national  ownership  which  I  recommend  in  this 
work,  still  the  objection  mentioned  above  is  more 
applicable  to  municipal  ownership  than  to  ownership 
by  the  national  government,  which  is  advocated  by 
me.  I  refer  you  to  the  i30stofiice  department.  What 
corporation  has  so  many  employes  and  yet  has  so 
few  instances  of  rascality?  The  inspector  goes  to 
any  part  of  the  country;  he  goes  without  warning; 
he  examines  the  books  and  he  is  an  expert  at  his 
work;  he  is  a  stranger  absolutely  in  most  instances 
to  the  employes  whose  work  and  accounts  he  is  to 
examine,  and  those  employes  have  no  political  pull 
or  influence  which  they  can  exert  on  him,  and  the 
result  is,  that  although  he  has  every  facility  for  dis- 
covering wrongful  actions  on  the  part  of  employes 
or  officials,  experience  of  many  years  has  taught  us 
that  very  little  of  that  sort  of  thing  is  discovered. 
The  objection  made  to  governmental  ownership  is 
that  it  is  a  future  possihility  that  great  corruption  will 
prevail.  I  call  your  attention  to  the  fact  that  now, 
not  as  a  matter  of  theory,  but  as  a  matter  of  actual 


124  THE    AUTOMATIC    SYSTEM 

fact,  the  profits  arising  from   railroads   and   other 
great  utilities  are  openly  and  as  a  matter  of  law 
divided  amongst  a  few  persons.    You  fear  that  under 
governmental  ownership  some  of  these  profits  may  he 
wrongfully  used.    At  present  you  stand  idly  by  with 
the  knowledge  that  aJl  of  these  profits  are  actually 
going  into  the  pockets  of  a  small  number  of  indi- 
viduals.   Your  attitude  strikes  me  as  rather  ridicu- 
lous.   Let  me  ask  you  as  a  sensible  person:    Suppose 
you  now  pay  five  cents  as  a  street  car  fare.    Under 
government  ownership  (if  the  same  result  vi  re  vails 
as  prevailed  in  the  United  States  mail  service)  you 
will  only  have  to  pay  a  street  car  fare  of  two  and 
one-half  cents.    At  that  time  you  will  be  saving  two 
and  one-half  cents  which  now  goes  into  the  pockets 
of  a  few.    Do  you  think  the  two  and  one-half  cents 
which  you  thus  save  will  be  divided  amongst  a  gang 
of  politicians  ?    I  hope  you  do  not  think  so.    Let  me 
ask  you  again:    Suppose  you  are  now  working  for 
a  railroad  and  receive  a  certain  amount  of  salary. 
Under  public  ownership  (judging  from  the  result  as 
shown  in  the  operation  of  the  United  States  mail  ser- 
vice) you,  as  an  employe,  will  receive  an  increase  in 
salary  of  ten  per  cent,  and  upward.    Will  that  ten 
per  cent,  be  divided  amongst  a  gang  of  corrupt  poli- 
ticians, as  it  is  now  divided  amongst  a  few  manipu- 
lators of  public  utilities?    If  not,  why  do  you  try  to 
make  yourself  believe  that  more  will  be  stolen  from 
the  public  under  public  ownership    than    is    today 
taken  from  the  public  through  the  operation  of  the 
foolish  laws  which  allow  a  few  individuals  to  pocket, 
as  a  matter  of  alleged  right,  the  profits  arising  out  of 
these  important  public  utilities  t 


CHAPTER  IX. 

TRUSTS. 

I  suppose  at  this  date  any  work  on  political 
economy  which  failed  to  discuss  the  matter  of  trusts 
would  be  incomplete.  Trusts,  like  all  other  things, 
exist  for  a  reason.  They  are  the  result  of  a  cause. 
Their  growth  is  easily  traceable.  There  was  once  a 
time  when  the  different  mercantile  concerns  of  this 
countr}^  were  comparatively  small.  It  is  true  that  the 
population  at  that  time  was  small  also,  but  even  with 
the  population  such  as  it  was,  it  was  found  that  a  lim- 
ited territory  was  all  that  any  firm  needed  in  which 
to  do  business,  but  as  our  postal  service  was  per- 
fected, and  as  our  telegraph  and  railroad  lines  began 
to  thickly  interlace  and  penetrate  all  sections  of  our 
land,  the  facilities  for  commerce  became  such,  and 
at  the  same  time,  the  growth  in  wealth  and  impor- 
tance of  some  of  our  business  firms  became  such  that 
it  was  found  that  the  trade  territories  of  those  firms 
began  to  interfere  with  one  another,  while  the  firms 
multiplied  in  number  and  produced  so  extensively 
that  under  our  present  system  their  output  was  re- 
garded as  over-production.  Indeed  it  became  evident 
that  one  large  firm  in  any  line  of  industry  would  be 
able  to  supply  the  demands  of  the  whole  country  in 
its  line.  Now,  in  the  natural  course  of  trade  there 
would  have  been  a  great  commercial  war,  involving 
the  ruin  of  most  of  the  different  firms,  ruthlessly 
oppressing  the  workmen  in  the  different  lines  of 
trade,  as  each  firm  made  an  effort  to  capture  the 


136  THE    AUTOMATIC    SYSTEM 

market,  by  producing  its  goods  at  a  smaller  price 
than  the  others ;  and  finally  ending  up  with  all  of  us 
at  the  mercy  of  the  successful  firms.  But  the  usual 
course  of  trade  was  departed  from.  We  poor  fool 
common  mortals  have  long  smacked  our  lips  over  a 
stock  phrase  in  commercial  parlance  to  the  effect 
that  "competition  is  the  life  of  trade,"  and  it  has 
sounded  so  good  that  we  have  accepted  it  as  true 
without  pausing  to  consider  that,  while  competition 
in  one  direction  is  a  good  thing,  if  the  competition  be 
in  another  direction,  it  is  a  very  poor  thing.  Thus, 
if  firms  compete  with  one  another  to  produce  a  high 
class  article  for  the  public,  and  vie  with  one  another 
in  rendering  the  public  good  service,  the  result  is 
of  undoubted  benefit  to  trade,  but,  if  the  competition 
is  in  the  other  direction,  and  each  firm  seeks  simply 
to  produce  a  cheaper  article  than  the  others  do,  and 
seeks  to  lessen  its  expenses  in  every  way,  the  result 
upon  the  trade,  and  upon  the  firms  and  laborers  en- 
gaged in  it,  is  undoubtedly  harmful.  Competition  is, 
therefore,  usually  accompanied  by  bad  results  as  well 
as  good  results,  because,  when  firms  compete  at  all, 
they  do  not  content  themselves  with  competing  in 
the  manner  mentioned  in  the  first  instance  above, 
but  the  fierce  fight  goes  right  on,  and  the  harmful 
effects  ensue  which  result  from  the  second  class  of 
competition  instanced  above.  It  did  not  take  our 
big  business  men  long  to  find  this  out,  and  they  de- 
cided that,  instead  of  fighting  the  thing  out  to  see 
which  would  be  the  surviving  firm,  the  best  thing 
for  them  to  do  would  be  for  the  most  powerful 
amongst  them  to  unite  and  make  one  big,  strong 
aggregation  of  capital,  capable  of  immediately  de- 


THE    AUTOMATIC    SYSTEM  127 

ciding  the  question  of  survivorship,  and  powerful 
enough  to  dominate  all  the  smaller  firms  in  business. 
There  are  two  favorite  methods  of  forming  trusts. 
One  of  them  is  undoubtedly  criminal  on  its  face, 
while  the  other  has  such  a  startling  resemblance  to 
a  lawful  corporation  that  to  distinguish  it  from  a 
lawful  one  we  have  to  look  beyond  the  mere  form 
and  substance  in  which  we  find  it  and  go  into  the 
matter  of  the  intent  and  purpose  of  its  creation.  In 
the  first  instance  the  various  members  continue  to 
exist  as  individual  firms,  but  boldly  enter  into  a 
criminal  agreement  with  one  another.  In  the  other 
instance,  the  firms  actually  abandon  their  individual 
capacity  and  invest  their  assets  in  a  mammoth  con- 
cern usually  incorporated  under  the  laws  of  the  state 
of  New  Jersey.  This  latter  organization  is  in  due 
form  of  law,  and  its  criminal  feature  lies  only  in  the 
fact  that  it  was  formed  to  create  an  abnormal  condi- 
tion in  the  line  of  industry  which  it  seeks  to  control. 
Now,  we  common  people  might  be  very  thankful  to 
these  trusts  for  preventing  a  ruinous  commercial 
struggle  in  which  all  of  us  would  have  suffered  were 
it  not  for  one  thing.  That  thing  is  pie!  The  fact  of 
the  matter  is  that  these  gentlemen  have  not  given  us 
a  finger  in  the  pie  at  all.  They  have  not  run  these 
trusts  exactly  as  they  would  have  been  run  if  the 
people  could  have  had  their  say.  In  fact,  it  is  becom- 
ing evident  that  the  gentlemen  who  formed  them  had 
some  selfish  motive  in  view  aside  from  the  matter  of 
preventing  a  big  commercial  war.  The  trusts  remind 
me  of  a  lot  of  great  big  lemon  squeezers.  The  * '  dear 
public"  acts  as  the  lemon  and  the  stock  holders  of 
the  trust  get  all  iMe  Juide.    Some  df  y^  jxmy  tfot 


128  THE    AUTOMATIC    SYSTEM 

have  been  squeezed  yet,  but  the  situation  is  enough 
to  make  a  fellow  feel  "powerful  uneasy."  The  trust 
operates  by  running  smaller  firms  out  of  business,  or 
by  forcing  such  firms  to  carry  out  its  instructions; 
by  closing  down  the  sources  of  production  of  a  com- 
modity before  they  would  ordinarily  be  closed,  and 
by  maintaining  a  fictitious  price  on  the  articles  in 
which  it  deals.  When  it  is  perfectly  organized  it 
possesses  an  awful  power.  It  has  absolute  control  of 
a  certain  line  of  industry.  If  all  industries  were  con- 
trolled by  trusts,  humanity  would  be  helpless.  The 
trusts  would  be  masters  of  the  situation.  They  could 
even  play  the  joke  of  raising  the  wages  of  workmen 
ten  per  cent.  All  they  would  then  have  to  do  would 
be  to  raise  the  price  of  their  product  twenty  per  cent, 
and  it  might  look  at  first  blush  as  though  they  were 
helping  the  laboring  man,  but  in  reality,  the  opera- 
tion would  only  be  an  extra  hard  squeeze  upon  the 
lemon  squeezers.  The  trust  causes  money  to  cen- 
tralize much  quicker  than  it  would  if  the  various 
mcjnbers  of  the  trust  competed  with  one  another. 

The  trust  is  a  bad  thing.  The  people  say  it  must 
go.  Under  our  present  system,  when  it  does  go,  we 
will  have  in  its  stead  the  most  ruinous  war  of  competition 
that  the  commercial  world  has  ever  ivitnessed,  but  even 
that  may  be  preferable  to  having  the  whole  country 
under  the  control  of  a  few  men.  The  fact  of  the  mat- 
ter is  that  people  need  not  hope  for  much  relief  under 
any  of  the  old  conservative  political  parties  under 
their  present  platforms.  However,  let  us  see  by  what 
means  we  are  to  do  away  with  trusts.  The  current 
idea  of  the  matter  is  that  criminal  statutes  of  some 
sort  should  be  passed  under  which  prosecutions  may 


THE    AUTOMATIC    SYSTEM  129 

be  brought  against  the  men  constituting  their  mem- 
bership, looking  to  the  imprisonment  of  those  men, 
or  to  the  dissolution  of  their  corporate  body,  or  to 
the  confiscation  of  their  property.  This  is  another 
old-fashioned  idea  governments  have.  They  attack 
crime  in  its  results  and  pay  no  attention  to  its  causes. 
It  is  very  much  like  trying  to  remedy  a  break  in  a 
water  pipe  by  catching  and  carrying  away  the  water 
day  after  da}'  instead  of  having  a  i3lumber  fix  the 
break  in  the  pipe.  Would  it  not  be  better  to  stop 
the  cause  of  trusts  and  the  incentive  to  form  trusts 
than  to  try  the  almost  impossible  task  of  defeating 
these  powerful  capitalists  in  a  never-ending  series 
of  law  suits?  One  of  the  causes  of  trusts,  as  stated, 
is  the  fast  development  of  the  commercial  facilities 
in  this  country,  and  I  do  not  mean  that  that  should 
be  stopped.  The  other  elements  in  the  makeup  of 
the  cause  of  a  trust  are  the  centralization  of  enough 
capital  to  absolutely  handle  a  line  of  industry 
throughout  the  whole  country,  and  the  incentive 
which  manufacturers  have  to  cause  them  to  enter 
into  a  combine  to  limit  production  in  their  line  of 
industry.  When  the  laws  which  I  suggest  are  put 
in  force,  it  will  be  found  that  these  vast  aggregations 
of  money  capital  will  be  unmanageable  and  will  soon 
melt  away,  giving  place  to  the  old  healthy  condition 
of  smaller  firms  controlling  less  territory,  and  as  for 
the  incentive  to  stop  the  production  of  commodities, 
which  now  exists  amongst  the  members  of  a  trust, 
the  incentive  will  at  that  time  be  the  other  way,  be- 
cause the  products  of  labor  will  be  the  most  desirable 
form  of  wealth  in  which  to  invest,  and  at  that  time, 
if  any  set  of  men  strives  to  control  the  situation,  it 


180  THE    AUTOMATIC    SYSTEM 

will  be  the  object  of  that  set  of  men  to  procure  as 
much  of  the  products  of  labor  as  possible.  In  order 
to  do  this,  they  will  have  to  go  to  the  laborer.  There- 
fore, if  a  trust  is  attempted  to  be  formed,  it  will  be 
absolutely  powerless,  because  the  source  of  wealth 
and  the  balance  of  power  will  be  in  the  hands  of  the 
great  common  people  who  constitute  the  laboring 
classes.  My  friend,  you  should  think  well  before  you 
turn  aside  from  the  message  of  hope  which  I  here  de- 
liver to  you.  The  formation  of  trusts  indicates  that 
the  situation  has  worked  itself  to  a  point  where  it  has 
to  be  managed.  Should  the  government  manage  it 
or  should  we  let  a  few  men  manage  it  for  their  own 
selfish  purposes'?  Make  your  choice  now !  Certain  men 
in  this  country  at  certain  times  (very  properly)  cry 
out  for  law  and  order  and  good  government,  but  at 
other  times,  when  the  shoe  is  on  the  other  foot,  and 
they  think  their  own  ox  is  going  to  be  gored,  they 
solemnly  shake  their  heads  and  say,  ''That  govern- 
ment governs  best  which  governs  the  least."  In 
other  words,  it  is  all  right  to  bring  the  strong  arm  of 
the  government  to  bear  upon  the  poverty-crazed 
striker  who  threatens  to  riot,  but  when  the  govern- 
ment seeks  to  pass  laws  which  will  keep  certain  men 
from  producing  poverty  and  distress  by  their  crim- 
inal methods,  why  then — '  *  That  government  governs 
best  which  governs  the  least." 


CHAPTER  X. 

RECAPITULATION,    SHOWING   THE    SIMPLICITY    OF   THE 
REMEDY  SUGGESTED. 

And  now  I  will  indulge  in  a  short  recapitulation, 
as  from  it  you  will  get  a  much  clearer  idea  than  it  has 
been  possible  to  convey  to  you  in  the  necessarily 
separate  treatment  above  given  to  the  various  laws 
which  I  suggest :    If,  in  my  description  of  the  plan  of 
government  which  I  advocate,  I  have  presented  it  in 
a  light  which  makes  it  appear  to  be  complicated,  I 
have  indeed  been  unfortunate  in  the  use  of  language, 
for  its  simplicity  is  one  of  its  leading  features.  Upon 
careful  examination  it  will  be  found  that,  as  prom- 
ised in  an  earlier  chapter,  I  have  taken  up  the  com- 
plicated question  of  political  economy,  and  at  the 
point  of  its  juncture  to  the  problem  of  civil  govern- 
ment, have  discussed  it  along  the  lines  of  an  exact 
science.    Thus,    taking   the    doctrine    of    equality 
amongst  men  as  being  the  very  foundation  and  basic 
principle  of  a  republican  form  of  government,  I  have 
made  a  practical  application  of  that  doctrine  to  the 
three  things  of  most  importance  to  physical  man, 
to-wit:  land,  labor  and  money — land  being  necessary 
to  the  existence  of  humanity  at  all;  labor  being  the 
means  by  which  man  procures  from  the  land  his  ex- 
istence, and  money  being  the  means  by  which  the 
products  of  labor  are  exchanged  between  men.    By 
taxing  each  of  these  in  the  manner  suggested  in  this 
book,  a  continual  process  of  equalization  will  be  kept 
up  with  reference  to  all  of  them.    ' '  What  I ' '  you  ask, 


132  THE    AUTOMATIC    SYSTEM 

"do  you  mean  to  say  that  you  have  anywhere  sug- 
gested a  tax  on  labor  ? ' '    Certainly  I  have.    It  is  true 
I  have  not  done  so  in  the  case  of  the  labor  of  the  indi- 
vidual man,  for  there  is  no  necessity  for  such  a  tax, 
there  having  always  been  a  perfect  equalization  of 
labor  in  that  respect,  but  where  machinery  is  used, 
and  one  man  is  thus  enabled  to  control  what  is  equiv- 
alent to  the  labor  of  many  men,  it  will  be  seen  that 
my  plan  provides  for  a  tax  upon  labor  as  represented 
by  that  machinery.    It  is  a  plan  which  discards  the 
old-fashioned  idea  of  "taxation  for  revenue  only" 
and  puts  in  its  place  a  scientific  taxation.  The  savage 
chieftain  of  the  African  interior  is  just  as  far  ad- 
vanced in  statecraft  as  the  American  politician  of 
today  who  advocates  "taxation  for  revenue  only." 
Having  provided  for  a  beneficial  tax  on  the  three  im- 
portant things  mentioned  above,  my  plan  of  govern- 
ment develops  itself  in  a  natural  manner  and  right  in 
line  with  the  idea  of  equalization,  provides  for  a  dis- 
tribution of  all  excess  taxes  by  means  of  an  equal 
pension.    Thus,  you  see,  it  not   only   prevents   the 
harmful  centralization  of  capital,  but,  on  the  other 
hand,  absolutely  insures  that  at  least  once  a  month 
a  vast  sum  of  money  shall  be  placed  down  at  the  bot- 
tom of  the  channels  of  trade  in  the  shape  of  a  small 
sum  in  the  hands  of  each  citizen,  and  enabling  every- 
one, no  matter  how  unfortunate  or  poor,  to  be  a  con- 
sumer of  the  products  of  labor  to  at  least  a  small 
amount.    Another  feature  about  the  plan   is   that, 
although  simple,  it  is  adequate.     In    other   words, 
when  a  people  can  once  properly  regulate  and  control 
land,  labor  and  money,  other  things  with  reference  to 
their  physical  welfare  are  of  such  little  relative  im- 


THE    AUTOMATIC    SYSTEM  133 

portance  that  the  problem  of  civil  government  may- 
be said  to  have  been  solved.  If  we  can  prevent  the 
acquisition  and  speculative  holding  of  land  by  capi- 
talists, and  if  we  can  fix  things  so  that  the  products 
of  labor  will  be  the  most  desirable  form  in  which  to 
hold  wealth,  either  for  hoarding  or  for  speculation, 
and  so  that  the  laborer  will  be  aided  and  not  harmed 
by  machinery,  and  if  we  can  have  a  money  which  will 
circulate  and  be  a  real  medium  of  active  exchange, 
and  be  at  the  same  time  of  higher  purchasing  ability 
than  any  money  we  have  today,  then  I  say  to  you 
that  we  need  not  worry  about  other  affairs  of  govern- 
ment, but  that,  when  these  important  matters  are  set- 
tled, matters  of  police  and  fire  protection,  elections, 
public  schools,  public  trials,  etc.,  will  be  found  to  be 
amongst  the  simpler  problems  which  have  already 
been  almost  perfectly  solved.  When  commerce  was 
in  its  infancy  throughout  the  world  these  other  mat- 
ters were  of  more  importance  and  they  have  long 
since  received  the  attention  of  lawmakers  and  been 
dealt  with  in  a  manner  comparatively  satisfactory 
to  all  persons.  But  from  a  small  beginning,  that 
great  thing  known  as  commerce  has  grown  and 
grown  until  today  it  rules  the  destinies  of  men  and 
of  nations,  and  the  people  of  every  country  base 
their  hope  of  prosperity  and  success  in  every  line 
upon  their  hope  and  struggle  to  become  a  great  com- 
mercial people.  Such  being  the  position  which  com- 
merce occupies  among  all  civilized  people  of  today, 
it  must  become  evident  to  everyone  that  what  a  great 
commercial  people  needs  is  a  system  of  laws  which 
looks  after  and  protects  the  commercial  welfare  of 
that  people — not  a  system  which  by  means  of  trade 


184  THE    AUTOMATIC    SYSTEM 

balances  in  its  favor  with  other  nations  enables  it  to 
fatten  on  the  suffering  masses  of  those  other  nations, 
but  a  system  by  which  a  great  people  with  a  great 
country  can  be  prosperous  within  themselves,  no 
matter  how  the  trade  balances  may  be.  That,  and 
that  alone,  should  be  the  paramount  issue  in  this 
country  today.  Writers  upon  the  subject  of  political 
economy  have  long  deplored  the  fact  that  it  was  a 
subject  which  was  not  readily  reduceable  to  the  rules 
and  limits  of  an  exact  science,  and  have  apparently 
held  up  their  hands  in  despair  at  the  task.  Such  be- 
ing the  position  taken  by  the  professors  and  students 
of  a  subject  so  important  in  the  affairs  of  men,  it  has 
been  well  said  that  "the  price  of  liberty  is  eternal 
vigilance."  When  there  is  chaos  and  complication, 
and  lack  of  scientific  system,  men  must  indeed  keep 
a  vigilant  eye  upon  their  rights  and  liberties.  The 
reason  that  men  have  desired  to  reduce  civil  govern- 
ment to  a  science,  and  one  of  the  most  beneficial  fea- 
tures of  the  plan  of  government  which  I  advocate  in 
this  book,  is  that  such  a  scientific  form  of  government 
will  relieve  men  from  maintaining  this  ' '  eternal  vigi- 
lance" with  reference  to  their  rights  and  liberties, 
and  will  permit  them  to  turn  their  whole  attention  to 
those  nobler  and  higher  aims  for  which  they  were 
undoubtedly  created,  safe  in  the  knowledge  that 
their  mere  physical  and  corporal  welfare  is  being 
provided  for  by  a  scientific  and  mighty  system, 
which,  because  of  its  automatic  nature,  is  absolutely 
proof  against  mistake  and  impervious  to  corruption. 
The  world  is  going  ahead.  Not  only  is  it  going 
ahead,  but  it  is  moving  at  a  speed  which  is  marvel- 
ous.   Governments  can  not  stand  still.  Already  has 


THE   AUTOMATIC    SYSTEM  135 

the  ship  of  state  tugged  too  long  at  the  anchor  of 
conservatism.  We  must  up  with  the  anchor  and  un- 
furl the  sails  of  advanced  statecraft  to  the  strong 
winds  of  the  new  era.  Even  now  can  the  sullen  roar 
of  the  storm  of  popular  discontent  be  heard  afar.  No 
government  can  stand  still  and  weather  that  storm. 
The  successful  government  of  the  future  will  be  the 
one  which  rides  abreast  of  the  times.  Something 
must  be  done  in  the  United  States  today.  The  mighty 
influence  and  j^ower  possessed  by  corporations  indi- 
cate it.  The  awful  grasp  of  the  trusts  indicates  it. 
The  riots,  distress  and  failure  which  follow  in  the 
wake  of  the  great  unsuccessful  labor  strikes  of  the 
day  indicate  it.  The  apparent  intention  of  citizens 
to  take  the  situation  into  their  own  hands  by  forming 
great  labor  unions  indicates  it.  The  foreign  element 
at  work,  as  represented  l)y  our  citizens  naturalized 
during  the  last  quarter  of  the  century,  indicates  it. 
The  buying  and  stealing  of  elections  indicates  it.  I 
say  it  is  the  duty  of  all  true  Americans  to  take  the 
situation  in  hand  while  it  can  be  managed.  We 
want  to  keep  our  present  form  of  government.  We 
don't  want  anything  similar  to  a  French  Revolution. 
Neither  do  we  want  a  foreign  Socialism.  If  we  must 
have  that  which  smacks  of  Socialism,  let  it  be  a 
sober,  intelligent,  x\merican  Socialism,  grown  up  out 
of  the  calm  reasoning  which  men  possess  in  times  of 
peace,  and  a  Socialism  over  which  our  liberty-loving 
citizens  may  be  proud  to  have  their  flag  wave,  happy 
in  the  knowledge  that  there  has  been  a  great  stride 
in  the  march  of  progress  which,  since  its  birth,  that 
Qag  has  led,  and  that  i^eir  individual  rights  and)  grand 


136  THE    AUTOMATIC    SYSTEM 

public  institutions  still  remain  with  them,  strengthened 
and  not  weakened  by  that  Socialism. 

Having  mentioned  in  this  work  land,  labor  and 
money  as  the  three  things  of  most  importance  to 
physical  man,  some  curiosity  may  have  been  aroused 
as  to  what  subjects  I  consider  as  coming  next  in 
order.  Undoubtedly  the  next  in  importance  is  the 
privilege  of  trading  or  doing  business  by  the  indi- 
vidual with  a  view  to  amassing  wealth  by  means  of 
operating  industries  that  are  of  a  public  nature,  such 
as  railroads,  etc.  The  next  in  importance  is  the  priv- 
ilege of  doing  business  in  the  ordinary  lines  of  pro- 
duction and  trade.  The  first  of  these  last  mentioned 
subjects  needs  no  tax  to  control  it,  as  it  is  controlled 
under  the  plan  I  suggest  by  turning  the  entire  matter 
over  to  the  government.  The  second  constitutes  that 
great  network  of  legitimate  business  enterprises 
which  it  is  the  design  of  this  work  to  save  from  a 
state  of  absolute  Socialism  and  to  protect  and 
strengthen,  together  with  the  laborers  employed  both 
in  it  and  in  the  industries  of  a  public  nature  men- 
tioned above  as  constituting  the  first  class.  The 
plan  I  have  suggested  will  be  found  adequate  for 
this  purpose.  There  are  some  people,  however,  who 
think  that,  in  order  to  have  a  large  number  of  firms 
of  average  importance  in  this  latter  class,  and  in 
order  to  prevent  any  of  them  from  becoming  too 
powerful,  or  any  one  man  becoming  dangerously 
rich,  the  country  should  be  districted  with  reference 
to  each  line  of  industry  and  each  firm  restricted  to  its 
own  district  or  charged  a  tariff  on  all  goods  it  ships 
into  another  district.  Should  the  American  people 
at  any  time  in  the  future  deem  it  wise  to  put  in  oper» 


THE   AUTOMATIC    SYSTEM  137 

atiou  such  a  tariff  between  such  trade  districts,  this, 
too,  would  constitute  a  tax  which  would  be  consid- 
ered burdensome  by  the  people  unless  it  was  returned 
to  them  by  means  of  the  pension  mentioned  in  this 
work. 


CHAPTER  XI. 

CONCLUSION. 

I  had  intended  to  touch  upon  some  other  matters 
in  this  work,  and  in  addition,  to  set  forth  in  detail 
the  various  steps  which  it  will  be  necessary  for  the 
government  to  take  in  order  that  the  plan  here  sug- 
gested may  be  put  into  operation  without  undue  jolt 
or  jostle  in  making  the  change,  but  as  my  work  is 
upon  a  subject  which  unfortunately  is  considered 
dry  and  uninteresting  by  a  great  niunber  of  people, 
I  have  determined  to  leave  those  matters  as  subjects 
for  consideration  in  some  future  work,  feeling  that, 
if  I  make  this  book  too  lengthy,  it  may  prevent  its 
being  read  by  a  class  of  people  into  whose  hands  I 
very  much  desire  that  it  shall  fall.  People  are  but 
human,  and  even  the  greatest  students  would  hesi- 
tate before  they  essayed  to  read  a  lengthy  work  by 
an  obscure  author.  As  Holmes  puts  it  in  his  ''Elsie 
Venner,"  ''The  boldest  thinker  may  have  his  mo- 
ments of  languor  and  discouragement,  when  he  feels 
as  if  he  could  willingly  exchange  faiths  with  the  old 
beldame  crossing  herself  at  the  cathedral  door — nay, 
that  he  could  drop  all  coherent  thought  and  lie  in 
the  flowery  meadow  with  the  brown-eyed,  solemnly 
unthinking  cattle,  looking  up  to  the  sky  and  all  their 
simple  consciousness  staining  itself  blue,  then  down 
to  the  grass,  and  life  turning  to  a  mere  greenness, 
blended  with  confused  scents  of  herbs — no  individual 
mind  movement  such  as  men  are  teased  with,  but  the 


THE   AUTOMATIC    SYSTEM  189 

great  calm  cattle  sense  of  all  time  and  all  places  that 
know  the  milky  smell  of  herds. ' ' 

Men  and  women  of  America,  you  are  asleep;  I 
wish  to  awaken  you.  You  are  drifting;  I  wish  to 
guide  you. 

Stand  up,  ye  laboring  classes,  of  all  races,  both 
men  and  women,  in  the  city  and  on  the  farm !  Assert 
your  rights  with  intelligence  and  with  dignity.  Let 
not  cynics  and  pessimists  lead  you  to  believe  that 
there  is  no  hope  for  you.  Agree  upon  the  feasible 
and  practicable  action  which  this  book  advocates, 
and  then  all  pull  together  with  only  one  end  in  view. 
Form  public  ownership  clubs  in  every  city  and  town 
in  the  United  States,  with  a  view  to  turning  the  prop- 
erties thus  acquired  and  created  over  to  the  national 
government,  when  the  time  comes,  as  a  basis  for  the 
money  system  herein  advocated.  Let  your  motto  be, 
"Now  is  the  time."  Co-operate  to  the  end  that  the 
blessings  promised  you  in  these  pages  may  be  yours, 
and  that  you  may  live  under  the  benign  j^rotection 
of  a  government  that  has  a  warm  personal  interest 
in  every  citizen — a  government  alive  and  quivering 
with  human  impulses,  and  a  government  whose  just 
laws  will  reflect  the  calm  reasoning  of  an  advanced 
age,  and  the  mighty  pulsations  of  whose  monetary 
system  will  resemble  the  action  of  a  great  human 
heart,  thoroughly  and  often  pumping  life  and  energy 
into  both  the  weakest  and  the  strongest  channels  of 
trade,  correcting  the  disorders  of  commerce,  and  dis- 
pelling business  stagnation  wherever  it  may 
threaten  to  form. 

Stand  up,  ye  ministers  of  the  gospel  and  fathers 
of  religion,  of  whatever  faith  ye  may  be!    I  ask  of 


140  THE   AUTOMATIC    SYSTEM 

you  your  co-operation.  This  is  a  work  you  may  well 
take  up,  and  I  want  to  hear  a  sermon  on  this  subject 
from  every  pulpit  in  the  land.  While  crime  or  sin 
is  abnormal,  yet  it  is  not  unnatural,  but  follows  from 
logical  causes.  Hence  it  is  that  in  our  prayers  we 
ask  God  to  "Lead  us  not  into  temptation."  Those 
who  are  in  abject  poverty  are  continually  surrounded 
by  temptations.  If  you  will  help  to  abolish  poverty, 
you  will  not  only  lead  men  from  temptation,  but  you 
will  strengthen  their  souls  as  well  as  their  bodies. 

Stand  up,  ye  professional  men  and  teachers  of 
art  and  of  science !  I  know  that  you  are  in  the  front 
ranks  of  progress  and  that  the  condition  of  society 
is  loathesome  to  your  senses.  I  know  that  you  need 
no  argument  to  convince  you  of  the  innumerable 
crimes  nad  misfortunes  which  accompany  yjoverty, 
and  that  you  are  intelligent  enough  to  see  that  the 
prosperity  of  all  classes  depends  upon  the  prosperity 
of  the  great  mass  of  the  people,  and  I  know  that  I  am 
safe  in  relying  upon  your  co-operation. 

Stand  up,  ye  bookkeejoers,  telegraphers,  stenog- 
raphers and  clerks!  I  ask  your  co-operation.  You 
are  laboring  men  and  you  should  always  vote  in 
favor  of  those  laws  which  will  most  protect  labor- 
ing men. 

Stand  up,  ye  manufacturers,  merchants  and 
middle  men!  I  ask  your  co-operation.  The  road  to 
success  has  always  been  uphill  work  with  you.  No 
matter  how  honest,  or  talented,  or  energetic,  or  in- 
dustrious you  have  been,  your  burden  has  neverthe- 
less grown  heavier  as  the  inflexible  commercial  laws 
of  the  day  have  pressed  you  toward  the  wall.  Many 
of  you  have  gone  to  your  beds  at  night  in  a  solvent 


THE   AUTOMATIC    SYSTEM  141 

condition  and  have  risen  in  the  morning  mined  men, 
and  many  of  you  who  today  call  yourselves  success- 
ful men  have  left  to  you  as  the  scars  of  battle  shat- 
tered nerves,  ruined  health  and  uneasy  consciences. 
I  know  that  you  will  welcome  any  plan  by  which 
men  aid  instead  of  ruining  one  another. 

Stand  up,  ye  labor  unions !  I  ask  your  co-opera- 
tion. You  have  already  made  praiseworthy  efforts 
in  behalf  of  the  laborer  and  I  know  that  you  will 
hail  with  delight  a  plan  of  government  which  places 
labor  in  the  position  now  occupied  by  gold. 

Stand  up,  ye  charitable  societies,  and  men  and 
women  of  benevolence!  I  ask  of  you  your  co-opera- 
tion. With  all  your  work  and  all  your  prayers,  you 
have  been  able  to  make  but  a  slight  impression  on 
the  poverty,  distress  and  crime  in  this  world.  I  say 
to  you  that  when  we  have  in  operation  the  great  pul- 
sating governmental  machine  which  this  book  advo- 
cates, so  powerful  and  strong  will  it  be,  that  it  will 
be  just  as  difficult  for  any  man  or  set  of  men  to  harm 
society  at  that  time  as  j^ou  today  find  it  difficult  to 
aid  society  and  battle  with  its  evils. 

Stand  up,  ye  mothers,  sisters  and  daughters  I  I 
ask  your  co-operation.  I  know  that  if  you  had  in 
your  hands  the  ballot,  you  would  vote  for  a  system 
of  government  under  which  labor  would  become  so 
valuable  that  a  woman  would  receive  the  same  salary 
as  a  man  for  the  same  work.  I  know,  too,  that  your 
tender  sympathies  would  prompt  you  to  vote  for  a 
system  which  protected  the  weak. 

Stand  up,  ye  school  children  of  America,  ye 
bright-eyed,  quick-witted,  ambitious  and  stout- 
hearted sons  and  daughters  of  liberty!    You  are  the 


142  THE    AUTOMATIC    SYSTEM 

hope  and  pride  of  a  race.  On  your  shoulders  will 
soon  descend  the  burden  of  meeting  some  of  the 
gravest  situations  that  have  ever  confronted  hu- 
manity. I  know  that  you  will  take  up  the  work 
bravely  and  cheerfully,  and  I  know  that  you  will  suc- 
ceed. On  the  one  hand  the  great  money  powers  and 
trust  magnates  may  plot  against  you  in  secret,  while 
on  the  other  the  fiery-headed  advocates  of  anarchy 
and  bloodshed  may  wildly  wave  their  red  flag  of  re- 
volt, but  I  know  that  you  are  too  strong  to  let  the 
one  class  oppress  you,  and  not  so  weak  as  to  yield 
to  the  foolish  and  ruinous  teachings  of  the  other. 
I  invite  your  close  study  to  the  plan  of  government 
suggested  in  this  book,  and  T  know  that  I  can  count 
upon  your  co-operation. 

Stand  up,  oh  Omnipotence,  from  Thy  Judgment 
Seat,  and  grant  aid  to  the  struggling  races  Thou 
hast  created!  Extend  Thy  Beneficent  Hand  over 
this,  my  work,  and  if  it  be  worthy  in  Thine  Eyes, 
grant  it  Thy  blessing.  Thou  Who  hast  showered 
Thy  manifold  gifts  upon  humanity,  grant  to  it  the 
key  of  using  those  gifts.  Grant  that  men  may  not 
offend  Thee  longer  with  their  rapacity,  but  that  they 
may  live  in  brotherhood,  practicing  not  greed,  but 
benevolence;  building  up  instead  of  pulling  down, 
and  competing  not  in  sordid  price,  but  in  excellency 
and  endeavor.  Strengthen  Thou  with  Thine  Infinite 
Love  the  bonds  of  harmony  to  the  end  that  earth  may 
be  drawn  closer  to  Heaven,  and  if  there  be  those 
whose  regard  for  the  fleeting  things  of  this  world  is 
so  strong  as  to  cause  them  to  oppose  their  individual 
interests  to  the  good  of  a  race,  ''Forgive  them;  they 
know  not  what  they  do. ' '    With  Thine  aid  humanity 


Every  reader  of  The  Automatic 
System,  who  so  desires,  is  requested  to 
send  his  name,  to  be  recorded  as  a 
member  of  the 

NATIONAL  PUBLIC  OWNERSHIP 
LEAGUE 

We  desire  the  name  and  address  of 
every  citizen  who  favors  National  Public 
ownership  of  public  utilities. 

You  need  not  necessarilly  concur  in 
all  the  reforms  su^^ested  in  this  work; 
but  if  you  are  friendly  to  the  movement, 
and  take  the  trouble  to  send  us  your 
address,  you  can  aid  materially  in  a 
matter  that  w^ill  soon  interest  every 
citizen  of  the  United  States. 

Address 

I.  CRANE  CLARK, 

Denver,  Colo. 


THE   AUTOMATIC    SYSTEM  143 

will  care  not  for  the  opposition  of  these  men,  ''For 
Thine  is  the  Kingdom  and  the  Power  and  the  Glory, 
forever  and  ever.    Amen  I  * ' 

NOTE.— The  better  nature  of  the  author  of  this 
book  will  not  permit  him  to  quit  his  labor  without 
some  apology  for  the  egotistical  style  in  which  it  is 
written,  and  for  the  contemptuous  manner  in  which 
it  affects  to  treat  the  opinions  of  other  men.  I  wish 
to  say,  in  this  closing  note,  that  while  I  do  not  re- 
tract one  syllable  which  I  may  have  written  as  to  the 
merits  of  the  plan  of  government  advocated  in  this 
work,  and  while  I  am  sincere  in  every  suggestion 
which  I  have  made,  still  that  part  of  it  which  gives 
undue  prominence  to  the  alleged  personal  ability  and 
individual  importance  of  the  author  was  inserted 
solely  that  attention  might  be  attracted  and  a  certain 
portion  of  the  American  public  thus  coaxed  into 
studying  a  subject  which  it  is  prone  to  overlook  in 
its  readings.  In  view  of  the  habit  which  has  of  late 
years  manifested  itself  amongst  my  contemporaries 
of  merging  their  ideas  on  political  economy  into  the 
pages  of  an  alleged  novel,  I  think  I  am  excusable 
for  adopting  my  present  style. 

With  continued  good  wishes  for  the  future  wel- 
fare of  the  American  people,  I  am, 

I.  CRANE  CLARK. 

October  1,  1900. 


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